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  "data": {
    "topic": "non-compete",
    "state": "australian-capital-territory",
    "frontmatter": {
      "title": "Non-Compete Enforceability in the Australian Capital Territory",
      "description": "In the Australian Capital Territory a post-employment non-compete is enforceable only so far as it is reasonable to protect a legitimate business interest; the Territory has no statutory read-down power, so a court cannot rewrite an overbroad clause — in the Territory's leading case a 24-month restraint on a general manager was upheld while a parallel restraint failed entirely because an overbroad defined term could not be severed or read down.",
      "state": "Australian Capital Territory, Australia",
      "country_code": "AU",
      "lastReviewed": "2026-06-10",
      "license": "CC BY 4.0",
      "authors": [
        "steven-obiajulu"
      ],
      "summary": {
        "enforceability": "reasonable",
        "bottomLine": "An Australian Capital Territory non-compete binds a former employee only so far as it is reasonable to protect a legitimate business interest; there is no statutory read-down power, so an overbroad clause cannot be rewritten — in the Territory's leading case a 24-month restraint on a general manager was upheld, while a parallel restraint failed entirely because an overbroad defined term was embedded in the operative clauses and could not be severed or read down.",
        "keyLaw": "Common-law restraint of trade (no equivalent of the NSW Restraints of Trade Act 1976)",
        "exceptions": "Sale-of-business covenants are judged more leniently; a proposed federal ban would, if enacted, cover most employees earning under the Fair Work Act high-income threshold (with sale-of-business and above-threshold restraints reported to be excluded), but it is not yet law.",
        "courtNarrowing": "trimOnly",
        "appliesToContractors": "yes",
        "extendedForBreach": "Untested; in the Territory's leading case the restraint period had expired by trial, the injunction claim was not pressed, and the court awarded monetary relief rather than extending the restraint.",
        "maxLength": "No statutory cap; reasonableness turns on the combined effect of duration and area, and a 24-month restraint on a general manager — the longest rung of a cascading clause — was upheld in Steadfast ICT Security v Peak.",
        "noticeRequirement": "None",
        "saleOfBusiness": "Sale covenants judged less strictly than employee restraints",
        "customerNonSolicit": "Client solicitation breach enforced"
      },
      "about": [
        "Australian Capital Territory non-compete agreements",
        "ACT restraint of trade clauses",
        "Steadfast ICT Security v Peak restraint of trade",
        "cascading restraint clause Australian Capital Territory",
        "ACT no statutory read-down restraint of trade",
        "embedded definition severance restraint ACT",
        "Lindner v Murdock's Garage reasonableness",
        "ACT garden leave non-compete",
        "Canberra employee non-compete enforceability",
        "Australia proposed non-compete ban"
      ],
      "eyebrow": "Australian Capital Territory · Australia Law Practice Guide"
    },
    "questions": [
      {
        "slug": "enforceability",
        "label": "Are non-competes enforceable?",
        "heading": "Are employee non-competes enforceable in the Australian Capital Territory?",
        "answerText": "Only so far as they are reasonable. A post-employment non-compete is treated as a restraint of trade, which is presumed unenforceable as contrary to public policy unless the employer shows it goes no further than is reasonably necessary to protect a legitimate business interest, and the onus of proving reasonableness sits on the employer. The Territory's leading modern decision shows both sides of the test in a single case: a 24-month restraint on a general manager was held reasonable and its breach established, while a parallel restraint on a more junior employee failed entirely because its breadth made it unreasonable.",
        "sources": [
          {
            "id": "lindner-onus",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "Lindner v Murdock's Garage",
            "citation": "Lindner v Murdock's Garage [1950] HCA 48; (1950) 83 CLR 628 (per McTiernan J).",
            "url": "https://www.hcourt.gov.au/sites/default/files/eresources/1950/HCA/48.pdf",
            "proposition": "The employer bears the onus of proving circumstances showing the restriction on the employee's freedom to work is reasonable.",
            "verbatimQuote": "The onus was on the plaintiff firm to prove circumstances showing that the restriction on the defendant's freedom to work was reasonable.",
            "date": "1950-09-29",
            "anchor": "https://openagreements.org/practice-guides/non-compete/au/australian-capital-territory#src-lindner-onus"
          },
          {
            "id": "steadfast-24-month-upheld",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "Steadfast ICT Security Pty Ltd v Peak",
            "citation": "Steadfast ICT Security Pty Ltd v Peak [2021] ACTSC 199 (Mossop J).",
            "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/act/ACTSC/2021/199.html",
            "proposition": "A 24-month restraint on the company's general manager was held reasonable, having regard to the limited restraint area and the limitation to clients with whom he had direct dealings in the 12 months before termination.",
            "verbatimQuote": "In my view the 24-month restraint period is reasonable having regard to the limited restraint area, the role of Mr Peak in relation to clients to the extent to which it is disclosed by the evidence, and the limitation within the restraint to client or customers of the company with whom he has had direct dealings in the 12 months prior to the termination of his employment.",
            "date": "2021-08-30",
            "anchor": "https://openagreements.org/practice-guides/non-compete/au/australian-capital-territory#src-steadfast-24-month-upheld"
          },
          {
            "id": "steadfast-unreasonable-invalid",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "Steadfast ICT Security Pty Ltd v Peak",
            "citation": "Steadfast ICT Security Pty Ltd v Peak [2021] ACTSC 199 (Mossop J).",
            "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/act/ACTSC/2021/199.html",
            "proposition": "Restraint clauses driven by an overbroad defined term were held not to be reasonable restraints and therefore invalid against the employee.",
            "verbatimQuote": "Each of those is, as a result of the breadth of the definition, not a reasonable restraint. It is therefore invalid.",
            "date": "2021-08-30",
            "anchor": "https://openagreements.org/practice-guides/non-compete/au/australian-capital-territory#src-steadfast-unreasonable-invalid"
          },
          {
            "id": "steadfast-breach-established",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "Steadfast ICT Security Pty Ltd v Peak",
            "citation": "Steadfast ICT Security Pty Ltd v Peak [2021] ACTSC 199 (Mossop J).",
            "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/act/ACTSC/2021/199.html",
            "proposition": "Breach of the restraint by soliciting the employer's clients was established against the former general manager in relation to named clients.",
            "verbatimQuote": "So far as the soliciting of Steadfast clients is concerned, that is established in relation to Geo Group, Strategic Data, AFSA and the University of Canberra.",
            "date": "2021-08-30",
            "anchor": "https://openagreements.org/practice-guides/non-compete/au/australian-capital-territory#src-steadfast-breach-established"
          }
        ]
      },
      {
        "slug": "court-narrowing",
        "label": "Can a court narrow an overbroad clause?",
        "heading": "Can an Australian Capital Territory court narrow an overbroad non-compete?",
        "answerText": "Only in a limited way, and far less generously than many employers assume. The Territory has no statute that lets a court read an overbroad restraint down to a reasonable level, so the common-law severance limits apply: deletion of genuinely severable material is the most a court can do, and where the unreasonable breadth comes from a defined term embedded in the operative clauses, no question of severance can arise at all, because it is not possible to read down or sever the clauses which carry the definition. A clause that severance cannot save fails entirely.",
        "sources": [
          {
            "id": "steadfast-no-read-down",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "Steadfast ICT Security Pty Ltd v Peak",
            "citation": "Steadfast ICT Security Pty Ltd v Peak [2021] ACTSC 199 (Mossop J), citing Emeco International Pty Ltd v O'Shea [No 2] [2012] WASC 348; 225 IR 423.",
            "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/act/ACTSC/2021/199.html",
            "proposition": "Where an overbroad definition is embedded within the operative restraint clauses, no question of severance can arise because the clauses cannot be read down or severed.",
            "verbatimQuote": "No question of severance can arise in those circumstances because it is not possible to read down or sever the clauses which have embedded within them that definition: Emeco International Pty Ltd v O'Shea [No 2] [2012] WASC 348 ; 225 IR 423.",
            "date": "2021-08-30",
            "anchor": "https://openagreements.org/practice-guides/non-compete/au/australian-capital-territory#src-steadfast-no-read-down"
          },
          {
            "id": "steadfast-client-not-confined",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "Steadfast ICT Security Pty Ltd v Peak",
            "citation": "Steadfast ICT Security Pty Ltd v Peak [2021] ACTSC 199 (Mossop J).",
            "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/act/ACTSC/2021/199.html",
            "proposition": "The defined term driving the restraint was not temporally confined, so it captured any entity that had ever been a client, whether or not the employee was employed at the time or had any contact with it — which made the restraint unreasonable.",
            "verbatimQuote": "Because the definition is not temporally confined, it would capture any entity which had been a client of Steadfast at any time whether or not Mr Watt was employed by the company at that time or had any contact with it.",
            "date": "2021-08-30",
            "anchor": "https://openagreements.org/practice-guides/non-compete/au/australian-capital-territory#src-steadfast-client-not-confined"
          },
          {
            "id": "steadfast-embedded-invalid",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "Steadfast ICT Security Pty Ltd v Peak",
            "citation": "Steadfast ICT Security Pty Ltd v Peak [2021] ACTSC 199 (Mossop J).",
            "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/act/ACTSC/2021/199.html",
            "proposition": "Each operative clause carrying the overbroad embedded definition was, as a result of that breadth, not a reasonable restraint and therefore invalid.",
            "verbatimQuote": "Each of those is, as a result of the breadth of the definition, not a reasonable restraint. It is therefore invalid.",
            "date": "2021-08-30",
            "anchor": "https://openagreements.org/practice-guides/non-compete/au/australian-capital-territory#src-steadfast-embedded-invalid"
          }
        ]
      },
      {
        "slug": "cascading-clauses",
        "label": "Are cascading or ladder clauses valid?",
        "heading": "Are cascading or ladder restraint clauses valid in the Australian Capital Territory?",
        "answerText": "Yes — a cascading clause was squarely litigated in the Territory's leading case and its longest rung was enforced. The general manager's restraint in Steadfast ran for 24 months, or if that was unreasonable 18 months, or if that was unreasonable 12 months, or if that was unreasonable 6 months. The defendants attacked the two-year top rung as unreasonable, but Mossop J held the 24-month period reasonable, so the court never needed to descend the ladder.",
        "sources": [
          {
            "id": "steadfast-cascade-attack",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "Steadfast ICT Security Pty Ltd v Peak",
            "citation": "Steadfast ICT Security Pty Ltd v Peak [2021] ACTSC 199 (Mossop J, recording the defendants' submissions).",
            "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/act/ACTSC/2021/199.html",
            "proposition": "Mossop J recorded the defendants' submission — which ultimately failed — that because the employee had been employed for less than two years, the two-year rung, the longest of the cascading restraints, was unreasonable and unenforceable.",
            "verbatimQuote": "It also submitted that as Mr Peak had been employed for less than two years, the longest of the cascading restraints, namely for a period of two years, was unreasonable and unenforceable.",
            "date": "2021-08-30",
            "anchor": "https://openagreements.org/practice-guides/non-compete/au/australian-capital-territory#src-steadfast-cascade-attack"
          },
          {
            "id": "steadfast-cascade-top-rung",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "Steadfast ICT Security Pty Ltd v Peak",
            "citation": "Steadfast ICT Security Pty Ltd v Peak [2021] ACTSC 199 (Mossop J).",
            "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/act/ACTSC/2021/199.html",
            "proposition": "The 24-month period — the longest rung of the cascading restraint — was held reasonable having regard to the limited restraint area and the limitation to clients with whom the employee had direct dealings in the 12 months before termination.",
            "verbatimQuote": "In my view the 24-month restraint period is reasonable having regard to the limited restraint area, the role of Mr Peak in relation to clients to the extent to which it is disclosed by the evidence, and the limitation within the restraint to client or customers of the company with whom he has had direct dealings in the 12 months prior to the termination of his employment.",
            "date": "2021-08-30",
            "anchor": "https://openagreements.org/practice-guides/non-compete/au/australian-capital-territory#src-steadfast-cascade-top-rung"
          },
          {
            "id": "steadfast-duration-qualified",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "Steadfast ICT Security Pty Ltd v Peak",
            "citation": "Steadfast ICT Security Pty Ltd v Peak [2021] ACTSC 199 (Mossop J).",
            "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/act/ACTSC/2021/199.html",
            "proposition": "A duration that may appear long can still be reasonable where it is qualified by the restraint's location and the nature of the employee's connection with the client during employment.",
            "verbatimQuote": "Although the duration may appear to be long, it is qualified by the location and the nature of the connection with the client during the employment.",
            "date": "2021-08-30",
            "anchor": "https://openagreements.org/practice-guides/non-compete/au/australian-capital-territory#src-steadfast-duration-qualified"
          },
          {
            "id": "steadfast-no-severance-cascade",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "Steadfast ICT Security Pty Ltd v Peak",
            "citation": "Steadfast ICT Security Pty Ltd v Peak [2021] ACTSC 199 (Mossop J), citing Emeco International Pty Ltd v O'Shea [No 2] [2012] WASC 348; 225 IR 423.",
            "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/act/ACTSC/2021/199.html",
            "proposition": "A drafting defect embedded in a definition cannot be cured by severance, because it is not possible to read down or sever clauses that carry the definition within them.",
            "verbatimQuote": "No question of severance can arise in those circumstances because it is not possible to read down or sever the clauses which have embedded within them that definition: Emeco International Pty Ltd v O'Shea [No 2] [2012] WASC 348 ; 225 IR 423.",
            "date": "2021-08-30",
            "anchor": "https://openagreements.org/practice-guides/non-compete/au/australian-capital-territory#src-steadfast-no-severance-cascade"
          }
        ]
      },
      {
        "slug": "legitimate-interest",
        "label": "What interest must an employer protect?",
        "heading": "What legitimate interest must an employer show to enforce an Australian Capital Territory non-compete?",
        "answerText": "A protectable business interest — not a mere wish to avoid competition. An employer cannot restrain a former employee simply because a rival might benefit; an employer must be prepared to face the competition of a former employee if it comes. The recognised interests are the employer's client connection and goodwill and its confidential information, and both did real work in the Territory's leading case: the restraint upheld there was anchored to clients with whom the employee had direct dealings in his final year, and the employee's misuse of confidential information was separately established.",
        "sources": [
          {
            "id": "lindner-face-competition",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "Lindner v Murdock's Garage",
            "citation": "Lindner v Murdock's Garage [1950] HCA 48; (1950) 83 CLR 628 (per McTiernan J).",
            "url": "https://www.hcourt.gov.au/sites/default/files/eresources/1950/HCA/48.pdf",
            "proposition": "An employer has no protectable interest in freedom from competition by a former employee as such and must be prepared to face that competition; only a recognised interest can support a restraint.",
            "verbatimQuote": "An employer must be prepared to face the competition of a former employee if it comes.",
            "date": "1950-09-29",
            "anchor": "https://openagreements.org/practice-guides/non-compete/au/australian-capital-territory#src-lindner-face-competition"
          },
          {
            "id": "steadfast-direct-dealings",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "Steadfast ICT Security Pty Ltd v Peak",
            "citation": "Steadfast ICT Security Pty Ltd v Peak [2021] ACTSC 199 (Mossop J).",
            "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/act/ACTSC/2021/199.html",
            "proposition": "The restraint's limitation to clients with whom the employee had direct dealings in the 12 months before termination — the employer's client connection — was central to the finding that the restraint was reasonable.",
            "verbatimQuote": "In my view the 24-month restraint period is reasonable having regard to the limited restraint area, the role of Mr Peak in relation to clients to the extent to which it is disclosed by the evidence, and the limitation within the restraint to client or customers of the company with whom he has had direct dealings in the 12 months prior to the termination of his employment.",
            "date": "2021-08-30",
            "anchor": "https://openagreements.org/practice-guides/non-compete/au/australian-capital-territory#src-steadfast-direct-dealings"
          },
          {
            "id": "steadfast-confidential-breach",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "Steadfast ICT Security Pty Ltd v Peak",
            "citation": "Steadfast ICT Security Pty Ltd v Peak [2021] ACTSC 199 (Mossop J).",
            "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/act/ACTSC/2021/199.html",
            "proposition": "The employee breached his contractual confidentiality obligations by failing to keep the employer's confidential information confidential, using it outside his duties, and providing it to the competitor.",
            "verbatimQuote": "I am also satisfied that Mr Peak breached clause 13 by failing to keep the plaintiff's confidential information confidential, using it for purposes other than in the course of performing his duties as an employee of the plaintiff and providing confidential information to Mr Glavonjic and Dreamtime.",
            "date": "2021-08-30",
            "anchor": "https://openagreements.org/practice-guides/non-compete/au/australian-capital-territory#src-steadfast-confidential-breach"
          },
          {
            "id": "steadfast-fiduciary",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "Steadfast ICT Security Pty Ltd v Peak",
            "citation": "Steadfast ICT Security Pty Ltd v Peak [2021] ACTSC 199 (Mossop J).",
            "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/act/ACTSC/2021/199.html",
            "proposition": "The employee's course of conduct in transferring the employer's business to a competitor was a very clear breach of his fiduciary duties, which protect the employer independently of the restraint clause.",
            "verbatimQuote": "Mr Peak's course of conduct amounted to a very clear breach of his fiduciary duties to his employer.",
            "date": "2021-08-30",
            "anchor": "https://openagreements.org/practice-guides/non-compete/au/australian-capital-territory#src-steadfast-fiduciary"
          }
        ]
      },
      {
        "slug": "reasonableness-factors",
        "label": "How long and how wide can it be?",
        "heading": "How long and how wide can an Australian Capital Territory non-compete be?",
        "answerText": "There is no statutory limit; reasonableness is judged case by case on the combined effect of the restraint's duration and its area of operation, assessed as at the time the contract is made rather than with hindsight. A two-year restraint on a general manager was upheld where the area was limited and the client pool tightly defined; an area wider than the employer's business reasonably requires is likely to be void.",
        "sources": [
          {
            "id": "steadfast-combined-effect",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "Steadfast ICT Security Pty Ltd v Peak",
            "citation": "Steadfast ICT Security Pty Ltd v Peak [2021] ACTSC 199 (Mossop J).",
            "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/act/ACTSC/2021/199.html",
            "proposition": "Reasonableness is assessed on the combined effect of the restraint's duration and its area of operation, not on either dimension in isolation.",
            "verbatimQuote": "In assessing the reasonableness of the restraint, regard must be had to the combined effect of its duration and area of operation.",
            "date": "2021-08-30",
            "anchor": "https://openagreements.org/practice-guides/non-compete/au/australian-capital-territory#src-steadfast-combined-effect"
          },
          {
            "id": "steadfast-tested-at-contract",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "Steadfast ICT Security Pty Ltd v Peak",
            "citation": "Steadfast ICT Security Pty Ltd v Peak [2021] ACTSC 199 (Mossop J).",
            "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/act/ACTSC/2021/199.html",
            "proposition": "The validity of a restraint is assessed at the time the contract is made, not by reference to reasonableness as at the date the restraint would operate.",
            "verbatimQuote": "The validity of a restraint is to be assessed at the time at which the contract is made.",
            "date": "2021-08-30",
            "anchor": "https://openagreements.org/practice-guides/non-compete/au/australian-capital-territory#src-steadfast-tested-at-contract"
          },
          {
            "id": "steadfast-precise-concordance",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "Steadfast ICT Security Pty Ltd v Peak",
            "citation": "Steadfast ICT Security Pty Ltd v Peak [2021] ACTSC 199 (Mossop J), quoting Koops Martin v Dean Reeves [2006] NSWSC 449 (Brereton J), citing Coote v Sproule.",
            "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/act/ACTSC/2021/199.html",
            "proposition": "Reasonableness does not require precise concordance between the restraint and the employer's legitimate interest; a covenant may under-protect in one respect and go somewhat further than necessary in another without ceasing to be reasonable.",
            "verbatimQuote": "Reasonableness does not require precise concordance between the restraint and what might ultimately be seen as the employer's legitimate interest; it is accepted that a reasonable covenant might on the one hand not totally protect the employer in one respect, and on the other go somewhat further than is necessary for legitimate protection, without ceasing to be reasonable [ Coote v Sproule , 580-581].",
            "date": "2021-08-30",
            "anchor": "https://openagreements.org/practice-guides/non-compete/au/australian-capital-territory#src-steadfast-precise-concordance"
          },
          {
            "id": "lindner-area-too-wide",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "Lindner v Murdock's Garage",
            "citation": "Lindner v Murdock's Garage [1950] HCA 48; (1950) 83 CLR 628 (per McTiernan J).",
            "url": "https://www.hcourt.gov.au/sites/default/files/eresources/1950/HCA/48.pdf",
            "proposition": "A restraint whose geographic area is wider than reasonably necessary to protect the employer's business is unreasonable and void; here the area covered was held unreasonably wide.",
            "verbatimQuote": "I think it must be held that the area was unreasonably wide.",
            "date": "1950-09-29",
            "anchor": "https://openagreements.org/practice-guides/non-compete/au/australian-capital-territory#src-lindner-area-too-wide"
          },
          {
            "id": "steadfast-two-year-upheld",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "Steadfast ICT Security Pty Ltd v Peak",
            "citation": "Steadfast ICT Security Pty Ltd v Peak [2021] ACTSC 199 (Mossop J).",
            "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/act/ACTSC/2021/199.html",
            "proposition": "A 24-month restraint on a general manager was reasonable given the limited restraint area and the confinement of the restraint to clients with whom he had direct dealings in the 12 months before termination.",
            "verbatimQuote": "In my view the 24-month restraint period is reasonable having regard to the limited restraint area, the role of Mr Peak in relation to clients to the extent to which it is disclosed by the evidence, and the limitation within the restraint to client or customers of the company with whom he has had direct dealings in the 12 months prior to the termination of his employment.",
            "date": "2021-08-30",
            "anchor": "https://openagreements.org/practice-guides/non-compete/au/australian-capital-territory#src-steadfast-two-year-upheld"
          },
          {
            "id": "steadfast-salary",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "Steadfast ICT Security Pty Ltd v Peak",
            "citation": "Steadfast ICT Security Pty Ltd v Peak [2021] ACTSC 199 (Mossop J).",
            "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/act/ACTSC/2021/199.html",
            "proposition": "The employee's remuneration is a factual matter relevant to the reasonableness of a restraint's scope, since a higher salary may be more consistent with a broader restraint than a lower one.",
            "verbatimQuote": "One factual issue relevant to the reasonableness of the scope of the restraint was the amount that Mr Peak was being paid, as a higher salary may be more consistent with a broader restraint than a lower one.",
            "date": "2021-08-30",
            "anchor": "https://openagreements.org/practice-guides/non-compete/au/australian-capital-territory#src-steadfast-salary"
          }
        ]
      },
      {
        "slug": "garden-leave",
        "label": "Do paid restraints and garden leave help?",
        "heading": "Do paid restraints, garden leave, and fresh consideration help in the Australian Capital Territory?",
        "answerText": "They can strengthen an employer's position, but they do not displace the reasonableness requirement, and no staged Territory authority decides a garden-leave clause as such. What the Territory's leading case does establish is that pay matters to scope: the amount the employee was being paid was treated as a factual issue relevant to the reasonableness of the restraint, because a higher salary may be more consistent with a broader restraint than a lower one.",
        "sources": [
          {
            "id": "steadfast-salary-gl",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "Steadfast ICT Security Pty Ltd v Peak",
            "citation": "Steadfast ICT Security Pty Ltd v Peak [2021] ACTSC 199 (Mossop J).",
            "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/act/ACTSC/2021/199.html",
            "proposition": "The employee's pay is relevant to how broad a restraint can reasonably be: a higher salary may be more consistent with a broader restraint than a lower one.",
            "verbatimQuote": "One factual issue relevant to the reasonableness of the scope of the restraint was the amount that Mr Peak was being paid, as a higher salary may be more consistent with a broader restraint than a lower one.",
            "date": "2021-08-30",
            "anchor": "https://openagreements.org/practice-guides/non-compete/au/australian-capital-territory#src-steadfast-salary-gl"
          },
          {
            "id": "steadfast-real-remuneration",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "Steadfast ICT Security Pty Ltd v Peak",
            "citation": "Steadfast ICT Security Pty Ltd v Peak [2021] ACTSC 199 (Mossop J).",
            "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/act/ACTSC/2021/199.html",
            "proposition": "In assessing a significant restraint period the court looked to the employee's real remuneration, holding it inappropriate to assess the restraint only against the salary identified in the written contract.",
            "verbatimQuote": "In other words it would not be appropriate to assess the significant period of restraint only with regard to the level of remuneration identified in his written contract.",
            "date": "2021-08-30",
            "anchor": "https://openagreements.org/practice-guides/non-compete/au/australian-capital-territory#src-steadfast-real-remuneration"
          },
          {
            "id": "steadfast-tested-at-contract-gl",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "Steadfast ICT Security Pty Ltd v Peak",
            "citation": "Steadfast ICT Security Pty Ltd v Peak [2021] ACTSC 199 (Mossop J).",
            "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/act/ACTSC/2021/199.html",
            "proposition": "Validity is assessed at the time the contract is made, which governs how a restraint introduced mid-employment is assessed.",
            "verbatimQuote": "The validity of a restraint is to be assessed at the time at which the contract is made.",
            "date": "2021-08-30",
            "anchor": "https://openagreements.org/practice-guides/non-compete/au/australian-capital-territory#src-steadfast-tested-at-contract-gl"
          }
        ]
      },
      {
        "slug": "employer-breach",
        "label": "What if the employer breached first?",
        "heading": "What if the employer wrongfully dismissed the employee?",
        "answerText": "The restraint may fall away. The employer carries the onus of proving the restraint reasonable in the first place, so an employer seeking to enforce already starts from a position where it must justify the covenant. Beyond that, the long-standing common-law principle associated with General Billposting Co Ltd v Atkinson [1909] AC 118 is that an employer who wrongfully dismisses an employee — for example by repudiating the contract through a dismissal without the notice the contract requires — generally cannot afterwards enforce a post-employment restraint against that employee. The staged Territory authorities do not themselves decide that point, so it is best treated as a general principle a court may apply rather than a settled local rule.",
        "sources": [
          {
            "id": "lindner-onus-eb",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "Lindner v Murdock's Garage",
            "citation": "Lindner v Murdock's Garage [1950] HCA 48; (1950) 83 CLR 628 (per McTiernan J).",
            "url": "https://www.hcourt.gov.au/sites/default/files/eresources/1950/HCA/48.pdf",
            "proposition": "The employer bears the onus of proving circumstances showing the restriction on the employee's freedom to work is reasonable.",
            "verbatimQuote": "The onus was on the plaintiff firm to prove circumstances showing that the restriction on the defendant's freedom to work was reasonable.",
            "date": "1950-09-29",
            "anchor": "https://openagreements.org/practice-guides/non-compete/au/australian-capital-territory#src-lindner-onus-eb"
          },
          {
            "id": "steadfast-own-breach-response",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "Steadfast ICT Security Pty Ltd v Peak",
            "citation": "Steadfast ICT Security Pty Ltd v Peak [2021] ACTSC 199 (Mossop J).",
            "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/act/ACTSC/2021/199.html",
            "proposition": "Defendants could not rely on the employer's wind-down decisions to reduce their liability where those decisions were themselves a response to the defendants' own breaches — conduct and causation arguments cut both ways in restraint enforcement.",
            "verbatimQuote": "In my view, it is not open to the defendants to rely upon actions of Steadfast that were themselves a response to the defendants' own breach of contract in order to reduce their liability for the consequences of those breaches or breaches of their fiduciary duties.",
            "date": "2021-08-30",
            "anchor": "https://openagreements.org/practice-guides/non-compete/au/australian-capital-territory#src-steadfast-own-breach-response"
          }
        ]
      },
      {
        "slug": "tolling",
        "label": "Does the restriction pause or extend during a breach?",
        "heading": "Does an Australian Capital Territory non-compete pause or extend if the employee breaches?",
        "answerText": "This is an open question, and an employer should not assume the clock stops. No staged Territory authority holds that a restraint period tolls — pauses and then resumes — while a former employee is in breach or while litigation runs. The validity of a restraint is assessed at the time the contract is made, which sits uneasily with a clause that purports to lengthen the restraint automatically depending on the employee's later conduct.",
        "sources": [
          {
            "id": "steadfast-tested-at-contract-tolling",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "Steadfast ICT Security Pty Ltd v Peak",
            "citation": "Steadfast ICT Security Pty Ltd v Peak [2021] ACTSC 199 (Mossop J).",
            "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/act/ACTSC/2021/199.html",
            "proposition": "Validity is assessed at the time the contract is made, which is in tension with a clause that automatically extends the restraint based on the employee's later breach.",
            "verbatimQuote": "The validity of a restraint is to be assessed at the time at which the contract is made.",
            "date": "2021-08-30",
            "anchor": "https://openagreements.org/practice-guides/non-compete/au/australian-capital-territory#src-steadfast-tested-at-contract-tolling"
          },
          {
            "id": "steadfast-injunction-elapsed",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "Steadfast ICT Security Pty Ltd v Peak",
            "citation": "Steadfast ICT Security Pty Ltd v Peak [2021] ACTSC 199 (Mossop J).",
            "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/act/ACTSC/2021/199.html",
            "proposition": "Where the restraint period had elapsed before trial, the injunction claim was not pressed; the court did not extend the restraint to compensate for the breach.",
            "verbatimQuote": "The claim for an injunction was not pressed as the period during which the injunction might have operated had elapsed prior to trial.",
            "date": "2021-08-30",
            "anchor": "https://openagreements.org/practice-guides/non-compete/au/australian-capital-territory#src-steadfast-injunction-elapsed"
          },
          {
            "id": "steadfast-account-remedy",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "Steadfast ICT Security Pty Ltd v Peak",
            "citation": "Steadfast ICT Security Pty Ltd v Peak [2021] ACTSC 199 (Mossop J).",
            "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/act/ACTSC/2021/199.html",
            "proposition": "Rather than extending the restraint, the court treated an account of profits as the most appropriate remedy for the course of conduct and its consequences for the employer.",
            "verbatimQuote": "The account of profits is the most appropriate remedy because it most accurately responds to the course of conduct engaged in by Mr Peak and the consequences of that course of conduct for Steadfast.",
            "date": "2021-08-30",
            "anchor": "https://openagreements.org/practice-guides/non-compete/au/australian-capital-territory#src-steadfast-account-remedy"
          }
        ]
      },
      {
        "slug": "contractors-and-sale",
        "label": "Do the rules differ for contractors and business sales?",
        "heading": "Do Australian Capital Territory restraint rules differ for contractors and business sales?",
        "answerText": "Yes, in different directions. Restraints on independent contractors are assessed under the same restraint-of-trade doctrine as employee covenants — the same legitimate-interest requirement and the same no-wider-than-necessary test — so the label of the relationship matters less than the substance of the interest the restraint actually protects. Restraints given by the seller of a business, by contrast, are judged much more leniently, because a buyer is entitled to protect the goodwill it paid for.",
        "sources": [
          {
            "id": "lindner-sale-distinction",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "Lindner v Murdock's Garage",
            "citation": "Lindner v Murdock's Garage [1950] HCA 48; (1950) 83 CLR 628 (per Latham CJ).",
            "url": "https://www.hcourt.gov.au/sites/default/files/eresources/1950/HCA/48.pdf",
            "proposition": "A distinction is drawn between a restraint in a sale-of-business agreement and a restraint in an employment agreement, with the former treated more favourably.",
            "verbatimQuote": "A distinction is drawn between a restraint upon trade included in an agreement for the sale of a business and a restraint included in an agreement with an employee.",
            "date": "1950-09-29",
            "anchor": "https://openagreements.org/practice-guides/non-compete/au/australian-capital-territory#src-lindner-sale-distinction"
          },
          {
            "id": "lindner-sale-more-easily",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "Lindner v Murdock's Garage",
            "citation": "Lindner v Murdock's Garage [1950] HCA 48; (1950) 83 CLR 628 (per Latham CJ).",
            "url": "https://www.hcourt.gov.au/sites/default/files/eresources/1950/HCA/48.pdf",
            "proposition": "A restraint is more easily upheld in the sale-of-business context than in the employment context.",
            "verbatimQuote": "The restraint is more easily upheld in the former than in the latter case.",
            "date": "1950-09-29",
            "anchor": "https://openagreements.org/practice-guides/non-compete/au/australian-capital-territory#src-lindner-sale-more-easily"
          }
        ]
      },
      {
        "slug": "federal-reform",
        "label": "Is a federal non-compete ban coming?",
        "heading": "Is a federal ban on non-competes coming to Australia?",
        "answerText": "A ban has been proposed but is not yet law, and as of June 2026 the common-law restraint-of-trade framework above still governs in the Australian Capital Territory. According to Australian Government Treasury material and law-firm commentary, the Government announced in the 2025–26 Federal Budget that it intends to ban post-employment non-competes for workers earning under the Fair Work Act high-income threshold (reported at around AUD $183,100), with Treasury running a consultation on the design, and the reform expected to be legislated during 2026 and to take effect from 2027, operating prospectively. Those figures and dates come from that secondary material — Treasury announcements and commentary — not from any enacted statute. Until any ban is enacted, the existing common-law framework continues to govern.",
        "sources": [
          {
            "id": "steadfast-still-governs",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "Steadfast ICT Security Pty Ltd v Peak",
            "citation": "Steadfast ICT Security Pty Ltd v Peak [2021] ACTSC 199 (Mossop J).",
            "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/act/ACTSC/2021/199.html",
            "proposition": "Under the common-law restraint-of-trade framework that currently governs in the Australian Capital Territory, the validity of a restraint is assessed at the time the contract is made.",
            "verbatimQuote": "The validity of a restraint is to be assessed at the time at which the contract is made.",
            "date": "2021-08-30",
            "anchor": "https://openagreements.org/practice-guides/non-compete/au/australian-capital-territory#src-steadfast-still-governs"
          }
        ]
      }
    ]
  }
}