Brian is the sales director for a medium sized local marketing…

Brian is the sales director for a medium sized local marketing agency “SPACE” in Paramatta, NSW, leading a team of 15 sales representatives. Through his role he became privy to most of his company’s highly confidential information. He also had direct contact with the company’s most important clients. After 10 years in this position, he decides to resign from his position and look for new opportunities. He gives his company 4 weeks’ notice. The HR director responds with a three months’ written notice of termination of his employment, which is the required notice period as per his employment contract. At the same time, Brian is directed not to attend the office and not to undertake any work other than as directed by SPACE, but to remain available during business hours to respond to queries or problems and perform duties as requested until his resignation becomes effective.
Brian is also reminded of the post-employment restraints that he had agreed to as part of his employment contract.
5.1 The Employee must
(a) devote the whole of their time, attention and skill during normal business hours, and at other times as reasonably necessary, to their duties for the Company.
(b) faithfully and diligently perform the duties and exercise the powers entrusted to them from time to time.
(c) promote the interests and prosperity and enhance the reputation of the Company.
20.1 The Employee agrees not to carry on or be engaged, concerned or interested, directly or indirectly, in any capacity specified in paragraph (a) below, in any business or activity specified in paragraphs (b) to (d) below, within any area specified in paragraph (c) below for any period specified in paragraph (f) below:
(a) As … Employee … or consultant
(b) In any business or prospective business in competition with the Company or Related Body Corporate at the time of termination of employment

(e) In any areas specified in Item 7 of the Schedule
(f) During the period specified in Item 8 of the Schedule.
20.2 The Employee separately enters into each of the covenants resulting from combining separately each of the capacities in paragraph (a) above with each business or activity in paragraphs (b) to (d) above and combining each such combination with each geographical area in paragraph (e) above and combining each such combination with each period in paragraph (f) above with the Company and Related Bodies Corporate.
20.3 Each of these covenants constitutes an independent and separate restraint imposed on the Employee.
20.4 If any of those covenants is or will become unenforceable, that does not affect the validity and enforceability of the other covenants imposed under this clause, which remain binding on the Employee.
Item 7 Area (i) Australia
(ii) New South Wales; or
(iii) Sydney
Item 8 Period (i) 12 months;
(ii) 9 months; or
(iii) 6 months;
Within weeks of his resignation, Brian is approached by a marketing agency from Newcastle, NSW, that is looking to expand its business to Sydney. Brian is offered the position as Sales Director at NewCastle Marketing. He accepts the offer with the official employment commencing the day after his resignation becomes effective. However, he is also asked by his new employer to suggest capable colleagues at SPACE that might also be looking for new employment opportunities. Over the weekend, Brian calls his best sales representative, Lauchlan, to tell him about the exciting job opportunities at NewCastle Marketing. Lauchlan started to laugh during the conversation. Coincidentally, Lauchlan had seen the job advert and had just finished drafting his application for the vacant position as sales representative at NewCastle Marketing.
Jim, the CEO of SPACE, is outraged when he finds out that Brian not only moved to a competitor but also poached one of the best sales representatives. Jim believes that the intimate knowledge of their marketing strategies, pricing strategies and close relationship with their customers, amounted to confidential information that could be misused by Brian. Jim wants to enforce the restraint of trade in accordance with cl.20.1. He also believes that Brian has breached his fiduciary duties (cl. 5) and was not acting in good faith when he induced Lauchlan to apply for the position at NewCastle Marketing, while Brian was still on SPACE’s payroll. Jim wants to seek an interlocutory injunction that restrains Brian from joining before his non-compete obligation has lapsed and to find Brian in breach of his fiduciary duties. He also remembers a news report about a similar case being decided by a court in NSW.
Advise Jim.
Please cite case law in your advice.

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