I.F. Asia Pacific Pty Ltd v Galbally

[2003] VSC 192

Supreme Court of Victoria

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Interrogate

Catchwords

1. Contract
2. › Restraint of trade
3. › Employment contracts
4. › Non-solicitation covenants
5. › Whether covenant extending to clients of employer's related companies unreasonably wide
6. › Whether covenant extending to former clients and clients with whom employee had no contact unreasonably wide
7. › Severance
8. › Whether severance of offending portions justified
1. Contract
2. › Restraint of trade
3. › Employment contracts
4. › Non-employment covenants
5. › Whether covenant restraining employment by employer's clients unreasonably wide
6. › Whether business of new employer 'same as or similar to' that of former employer
1. Intellectual Property
2. › Confidential information
3. › Employer's databases
4. › Client lists
5. › Whether employer's contact management database constituted trade secret or confidential information
6. › Classification of confidential information in employment context
7. › Whether information part of employee's own skill and knowledge
1. Intellectual Property
2. › Confidential information
3. › Breach of confidence
4. › Whether former employee removed and used employer's confidential data
5. › Whether employer established breach of covenant prohibiting removal of documents

Quick Take

A non-solicitation covenant in an employment contract that extends to clients of the employer's undefined 'related companies', to former clients, and to clients with whom the employee had no contact, is void as an unreasonable restraint of trade and cannot be saved by reading down or severance where there is no evidence of the related companies' separate businesses and customer bases. An employer's contact management database (client names, addresses, contact details) does not constitute a trade secret and, at its highest, falls within the second category of Goulding J's classification in Faccenda Chicken — information that becomes part of the employee's skill and knowledge and is not protected after termination absent a valid restrictive covenant.