United Dairies v Felletti

In *United Dairies v Felletti*, the New South Wales Court of Appeal considered a dispute between United Dairies and Felletti concerning the interpretation and enforceability of a restraint of trade clause within an employment contract.

The central legal issue before the Court of Appeal was whether the restraint of trade clause, which sought to prevent the former employee from engaging in competitive activities within a specified geographical area and for a defined period after termination of employment, was reasonable and therefore legally enforceable. The Court had to determine if the clause went beyond what was necessary to protect the legitimate business interests of United Dairies.

The Court of Appeal found that the restraint of trade clause was unreasonable and therefore void. It reasoned that the scope of the restriction, both in terms of geographical reach and the duration, was wider than necessary to protect United Dairies' proprietary interests, such as its customer connections and confidential information. The Court applied the established legal principles governing restraints of trade, which require such clauses to be no wider than reasonably necessary to protect the employer's legitimate business interests and to be for the benefit of the public.

The Court of Appeal allowed the appeal and ordered that the injunction previously granted to United Dairies be dissolved.