{
  "type": "practice-guide",
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  "data": {
    "topic": "non-compete",
    "state": "northern-territory",
    "frontmatter": {
      "title": "Non-Compete Enforceability in the Northern Territory",
      "description": "In the Northern Territory a post-employment non-compete is presumptively void as a restraint of trade and binds a former employee only so far as it is reasonable; the Territory has no statutory read-down power, and in the leading Supreme Court employment case an eighteen-month restraint failed entirely because it was longer than necessary, even though the court considered fifteen months at most would have been reasonable.",
      "state": "Northern Territory, Australia",
      "country_code": "AU",
      "lastReviewed": "2026-06-10",
      "license": "CC BY 4.0",
      "authors": [
        "steven-obiajulu"
      ],
      "summary": {
        "enforceability": "reasonable",
        "bottomLine": "A Northern Territory non-compete is presumptively void and binds a former employee only so far as it is reasonable to protect a legitimate interest; there is no statutory read-down power, and in the leading Supreme Court employment case an eighteen-month restraint failed entirely as longer than necessary even though the court considered fifteen months at most would have been reasonable.",
        "keyLaw": "Common-law restraint of trade (no equivalent of the NSW Restraints of Trade Act 1976)",
        "exceptions": "Sale-of-business and franchise covenants are judged in their commercial context; 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; Australian courts treat rolling or indefinite restraints with suspicion and generally prefer damages over extending an injunction.",
        "maxLength": "No statutory cap; reasonableness is judged case by case — an eighteen-month restraint on an insurance broker was held void as longer than necessary (fifteen months at most would have been reasonable), while a six-month client-solicitation restraint was one the court said it would have found enforceable.",
        "noticeRequirement": "None",
        "saleOfBusiness": "Sale covenants judged less strictly than employee restraints",
        "customerNonSolicit": "Six-month client solicitation restraint noted as enforceable"
      },
      "about": [
        "Northern Territory non-compete agreements",
        "Northern Territory restraint of trade clauses",
        "Northern Territory no statutory read-down restraint of trade",
        "OAMPS Insurance Brokers v Shackcloth restraint of trade",
        "Henderson v Purairclean franchise restraint",
        "Mental Illness Fellowship of Australia v Sandrey non-solicitation",
        "Lindner v Murdock's Garage reasonableness",
        "cascading restraint clause Northern Territory",
        "Northern Territory garden leave non-compete",
        "Australia proposed non-compete ban"
      ],
      "eyebrow": "Northern Territory · Australia Law Practice Guide"
    },
    "questions": [
      {
        "slug": "enforceability",
        "label": "Are non-competes enforceable?",
        "heading": "Are employee non-competes enforceable in the Northern Territory?",
        "answerText": "Only so far as they are reasonable. A post-employment non-compete is treated as a restraint of trade, which the courts presume is invalid as contrary to public policy. The Supreme Court of the Northern Territory has stated the rule directly: contractual provisions that amount to an unreasonable restraint of trade are void and unenforceable, and the onus of proving that a restraint is reasonable falls on the party relying on it.",
        "sources": [
          {
            "id": "henderson-presumed-invalid",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "Henderson v Purairclean Pty Ltd",
            "citation": "Henderson v Purairclean Pty Ltd [2013] NTSC 29 (Riley CJ).",
            "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/nt/NTSC/2013/29.html",
            "proposition": "A restraint of trade clause is presumed invalid for public policy reasons, and the presumption is rebutted only if the party with the benefit of the restraint establishes that it is no wider than reasonably necessary.",
            "verbatimQuote": "There is a presumption that a restraint of trade clause is invalid. This is for public policy reasons.",
            "date": "2013-06-21",
            "anchor": "https://openagreements.org/practice-guides/non-compete/au/northern-territory#src-henderson-presumed-invalid"
          },
          {
            "id": "oamps-void-unenforceable",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "OAMPS Insurance Brokers Limited v Shackcloth",
            "citation": "OAMPS Insurance Brokers Limited v Shackcloth [2008] NTSC 29 (Southwood J).",
            "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/nt/NTSC/2008/29.html",
            "proposition": "The common law prohibits unreasonable restraints of trade, and contractual provisions amounting to an unreasonable restraint are void and unenforceable.",
            "verbatimQuote": "The common law prohibits unreasonable restraints of trade. Contractual provisions which amount to an unreasonable restraint of trade are void and unenforceable.",
            "date": "2008-07-30",
            "anchor": "https://openagreements.org/practice-guides/non-compete/au/northern-territory#src-oamps-void-unenforceable"
          },
          {
            "id": "oamps-onus",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "OAMPS Insurance Brokers Limited v Shackcloth",
            "citation": "OAMPS Insurance Brokers Limited v Shackcloth [2008] NTSC 29 (Southwood J), citing Lindner v Murdock's Garage (1950) 83 CLR 628.",
            "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/nt/NTSC/2008/29.html",
            "proposition": "The onus of proving that a restraint is reasonable rests on the party relying on the restraint.",
            "verbatimQuote": "The onus of proof that the restraint is reasonable is on the party relying on the restraint",
            "date": "2008-07-30",
            "anchor": "https://openagreements.org/practice-guides/non-compete/au/northern-territory#src-oamps-onus"
          },
          {
            "id": "oamps-adequate-protection",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "OAMPS Insurance Brokers Limited v Shackcloth",
            "citation": "OAMPS Insurance Brokers Limited v Shackcloth [2008] NTSC 29 (Southwood J), stating the test from Brightman v Lamson Paragon Ltd (1914) 18 CLR 331 per Isaacs J.",
            "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/nt/NTSC/2008/29.html",
            "proposition": "A restraint is reasonable only if it is necessary to give the protected party adequate protection while preserving the fullest liberty of action consistent with that protection for the restrained party.",
            "verbatimQuote": "A restraint of trade clause is reasonable if it is necessary to provide adequate protection to the party who has the benefit of the restraint and at the same time preserves the fullest liberty of action consistent with that protection to the party who has the burden of the restraint",
            "date": "2008-07-30",
            "anchor": "https://openagreements.org/practice-guides/non-compete/au/northern-territory#src-oamps-adequate-protection"
          }
        ]
      },
      {
        "slug": "court-narrowing",
        "label": "Can a court narrow an overbroad clause?",
        "heading": "Can a Northern Territory court narrow an overbroad non-compete?",
        "answerText": "Do not count on it. The Northern Territory has no statute that lets a court read an overbroad restraint down to a reasonable level, so an employer is left with the common-law position: a clause that goes further than the legitimate interest requires is simply void. The leading local employment case shows the consequence — the Supreme Court held an eighteen-month restraint void as longer than necessary even while observing that fifteen months at most would have been reasonable, and it dismissed the claim rather than enforcing the clause for the shorter period.",
        "sources": [
          {
            "id": "oamps-too-long",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "OAMPS Insurance Brokers Limited v Shackcloth",
            "citation": "OAMPS Insurance Brokers Limited v Shackcloth [2008] NTSC 29 (Southwood J).",
            "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/nt/NTSC/2008/29.html",
            "proposition": "A restraint clause is unreasonable if the term of the restraint is for too long a period.",
            "verbatimQuote": "Clause 8 will be unreasonable if the term of the restraint is for too long a period.",
            "date": "2008-07-30",
            "anchor": "https://openagreements.org/practice-guides/non-compete/au/northern-territory#src-oamps-too-long"
          },
          {
            "id": "oamps-clause-void",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "OAMPS Insurance Brokers Limited v Shackcloth",
            "citation": "OAMPS Insurance Brokers Limited v Shackcloth [2008] NTSC 29 (Southwood J).",
            "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/nt/NTSC/2008/29.html",
            "proposition": "An eighteen-month restraint on an insurance broker was held unreasonable and void as longer than necessary; the Court considered fifteen months at most would have been reasonable, and the employer's enforcement claim was dismissed rather than the clause being enforced for a shorter period.",
            "verbatimQuote": "In all of the circumstances I find that the restraint of trade clause contained in clause 8 of the letter dated 3 April 2003, which contained the defendant's contract of employment with the plaintiff, was unreasonable and is void. It was longer than necessary. A reasonable length of time for the duration of the restraint would have been a period of 15 months at the most.",
            "date": "2008-07-30",
            "anchor": "https://openagreements.org/practice-guides/non-compete/au/northern-territory#src-oamps-clause-void"
          },
          {
            "id": "henderson-readdown-term",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "Henderson v Purairclean Pty Ltd",
            "citation": "Henderson v Purairclean Pty Ltd [2013] NTSC 29 (Riley CJ).",
            "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/nt/NTSC/2013/29.html",
            "proposition": "The franchise agreement before the Court itself provided for the reading down of the restraint clause and severance where necessary; the Court fixed a twelve-month period without analysing that machinery.",
            "verbatimQuote": "Clause 24.2 provided for the reading down of clause 24 and severance where necessary.",
            "date": "2013-06-21",
            "anchor": "https://openagreements.org/practice-guides/non-compete/au/northern-territory#src-henderson-readdown-term"
          }
        ]
      },
      {
        "slug": "cascading-clauses",
        "label": "Are cascading or ladder clauses valid?",
        "heading": "Are cascading or ladder restraint clauses valid in the Northern Territory?",
        "answerText": "There is no Northern Territory decision squarely upholding or striking down a cascading clause, so treat their validity as untested locally rather than assured. The closest local authority is the franchise case, where the restraint period was expressed as a graduated period running from three months through to three years and the Court enforced the restraint for twelve months as sufficient to protect the franchisor — but it did so without any doctrinal analysis of the ladder mechanism itself.",
        "sources": [
          {
            "id": "henderson-graduated-period",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "Henderson v Purairclean Pty Ltd",
            "citation": "Henderson v Purairclean Pty Ltd [2013] NTSC 29 (Riley CJ).",
            "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/nt/NTSC/2013/29.html",
            "proposition": "The franchise restraint before the Court expressed the restraint period as a graduated period of three months through to three years.",
            "verbatimQuote": "The restraint period was expressed as a graduated period of three months through to three years or 'any other period during which a person seeking to enforce clause 24 is entitled at law to the benefit of protection afforded by the Franchisee's covenant contained in clause 24 after the expiry or termination of this Agreement.'",
            "date": "2013-06-21",
            "anchor": "https://openagreements.org/practice-guides/non-compete/au/northern-territory#src-henderson-graduated-period"
          },
          {
            "id": "henderson-one-year",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "Henderson v Purairclean Pty Ltd",
            "citation": "Henderson v Purairclean Pty Ltd [2013] NTSC 29 (Riley CJ).",
            "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/nt/NTSC/2013/29.html",
            "proposition": "Faced with a graduated restraint period and a submission for two years, the Court considered the lesser period of one year more appropriate and sufficient to protect the franchisor's interests.",
            "verbatimQuote": "In my opinion the lesser period of restraint for one year from 29 February 2012 is more appropriate. That, in my view, would have been sufficient to protect the interests of the franchisor in all the circumstances.",
            "date": "2013-06-21",
            "anchor": "https://openagreements.org/practice-guides/non-compete/au/northern-territory#src-henderson-one-year"
          },
          {
            "id": "henderson-twelve-months",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "Henderson v Purairclean Pty Ltd",
            "citation": "Henderson v Purairclean Pty Ltd [2013] NTSC 29 (Riley CJ).",
            "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/nt/NTSC/2013/29.html",
            "proposition": "The restraint of trade clauses in the franchise agreements were held valid and enforceable for the identified area and for twelve months from termination of the franchise.",
            "verbatimQuote": "The restraint of trade clauses in both the Jaymak Franchise Agreement and the Purairclean Franchise Agreement are valid and enforceable for the identified area and for the period of 12 months from the date of termination of the franchise.",
            "date": "2013-06-21",
            "anchor": "https://openagreements.org/practice-guides/non-compete/au/northern-territory#src-henderson-twelve-months"
          }
        ]
      },
      {
        "slug": "legitimate-interest",
        "label": "What interest must an employer protect?",
        "heading": "What legitimate interest must an employer show to enforce a Northern 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 in the Territory cases are the employer's customer connection and goodwill and, in the franchise setting, the franchise business itself and the confidential information provided within it.",
        "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/northern-territory#src-lindner-face-competition"
          },
          {
            "id": "oamps-customer-connection",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "OAMPS Insurance Brokers Limited v Shackcloth",
            "citation": "OAMPS Insurance Brokers Limited v Shackcloth [2008] NTSC 29 (Southwood J), quoting Latham CJ in Lindner v Murdock's Garage (1950) 83 CLR 628.",
            "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/nt/NTSC/2008/29.html",
            "proposition": "A covenant protecting an employer against an employee who, through close and personal contact with customers, could take away customers and damage the goodwill of the business is, absent some other invalidating element, valid.",
            "verbatimQuote": "Where an employee is in a position which brings him into close and personal contact with the customers of a business in such a way that he may establish personal relations with them of such a character that if he leaves his employment he may be able to take away from his former employer some of his customers and thereby substantially affect the proprietary interest of that employer in the goodwill of his business, a covenant preventing him from accepting employment in a position in which he would be able to use to his own advantage and to the disadvantage of his former employer the knowledge of and intimacy with the customers which he obtained in the course of his employment should, in the absence of some other element which makes it invalid, be held to be valid.",
            "date": "2008-07-30",
            "anchor": "https://openagreements.org/practice-guides/non-compete/au/northern-territory#src-oamps-customer-connection"
          },
          {
            "id": "henderson-franchisor-interest",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "Henderson v Purairclean Pty Ltd",
            "citation": "Henderson v Purairclean Pty Ltd [2013] NTSC 29 (Riley CJ).",
            "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/nt/NTSC/2013/29.html",
            "proposition": "A franchisor's interest in protecting the franchise business and preserving confidential information provided within it that could be used to compete is capable of being afforded protection.",
            "verbatimQuote": "It has been recognised that the interest of a franchisor in protecting the franchise business and preserving confidential information provided within that business and which can be used to compete with the franchisor is capable of being afforded protection.",
            "date": "2013-06-21",
            "anchor": "https://openagreements.org/practice-guides/non-compete/au/northern-territory#src-henderson-franchisor-interest"
          },
          {
            "id": "sandrey-no-inference",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "Mental Illness Fellowship of Australia (NT) Inc v Sandrey",
            "citation": "Mental Illness Fellowship of Australia (NT) Inc v Sandrey [2025] NTSC 57 (Kelly J).",
            "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/nt/NTSC/2025/57.html",
            "proposition": "The employer failed to prove breach of a six-month client-solicitation restraint: the Court was not prepared to infer that any of the seven departing clients left as a result of solicitation by the former employee.",
            "verbatimQuote": "I am not prepared to infer that any of the seven clients who left MIFANT did so as a result of any solicitation by Mr Sandrey.",
            "date": "2025-08-12",
            "anchor": "https://openagreements.org/practice-guides/non-compete/au/northern-territory#src-sandrey-no-inference"
          },
          {
            "id": "sandrey-clients-choice",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "Mental Illness Fellowship of Australia (NT) Inc v Sandrey",
            "citation": "Mental Illness Fellowship of Australia (NT) Inc v Sandrey [2025] NTSC 57 (Kelly J).",
            "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/nt/NTSC/2025/57.html",
            "proposition": "A solicitation restraint restricts the former employee's freedom to solicit; it cannot restrict the clients' own freedom to change service providers, whether to follow the employee or out of dissatisfaction with the former employer.",
            "verbatimQuote": "The restraint of trade clause restricts Mr Sandrey's freedom to solicit former clients. It cannot restrict the former clients' freedom to change service providers whether to follow Mr Sandrey because they were happy with the service he provided or simply to leave MIFANT to go elsewhere because of dissatisfaction with the services being provided by MIFANT.",
            "date": "2025-08-12",
            "anchor": "https://openagreements.org/practice-guides/non-compete/au/northern-territory#src-sandrey-clients-choice"
          }
        ]
      },
      {
        "slug": "reasonableness-factors",
        "label": "How long and how wide can it be?",
        "heading": "How long and how wide can a Northern Territory non-compete be?",
        "answerText": "There is no statutory limit; reasonableness is decided case by case on the activity restrained, the geographic area, the duration, and the employee's actual customer influence. Reasonableness is tested as at the date the contract was made, not by hindsight. A geographic area wider than the employer's business reaches is likely to be unreasonable, and a duration longer than the protected interest requires makes the clause void — in the leading Territory employment case eighteen months was too long where fifteen months at most was justified.",
        "sources": [
          {
            "id": "oamps-tested-at-contract",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "OAMPS Insurance Brokers Limited v Shackcloth",
            "citation": "OAMPS Insurance Brokers Limited v Shackcloth [2008] NTSC 29 (Southwood J).",
            "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/nt/NTSC/2008/29.html",
            "proposition": "The reasonableness of a restraint is determined as at the date the contract of employment was made, not with hindsight.",
            "verbatimQuote": "The reasonableness of the restraint is to be determined at the date the contract of employment was made.",
            "date": "2008-07-30",
            "anchor": "https://openagreements.org/practice-guides/non-compete/au/northern-territory#src-oamps-tested-at-contract"
          },
          {
            "id": "oamps-renewal-cycle",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "OAMPS Insurance Brokers Limited v Shackcloth",
            "citation": "OAMPS Insurance Brokers Limited v Shackcloth [2008] NTSC 29 (Southwood J).",
            "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/nt/NTSC/2008/29.html",
            "proposition": "For a customer-connection interest in an insurance portfolio, the measure of reasonable duration was the length of one complete cycle of renewals for the clients' insurance policies.",
            "verbatimQuote": "I accept the plaintiff's submission that the question for the Court to determine is, what is the reasonable length of one complete cycle of renewals for the insurance premiums in the defendant's portfolio of clients?",
            "date": "2008-07-30",
            "anchor": "https://openagreements.org/practice-guides/non-compete/au/northern-territory#src-oamps-renewal-cycle"
          },
          {
            "id": "oamps-fifteen-months",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "OAMPS Insurance Brokers Limited v Shackcloth",
            "citation": "OAMPS Insurance Brokers Limited v Shackcloth [2008] NTSC 29 (Southwood J).",
            "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/nt/NTSC/2008/29.html",
            "proposition": "An eighteen-month restraint was unreasonable and void because it was longer than necessary; fifteen months at the most would have been a reasonable duration.",
            "verbatimQuote": "In all of the circumstances I find that the restraint of trade clause contained in clause 8 of the letter dated 3 April 2003, which contained the defendant's contract of employment with the plaintiff, was unreasonable and is void. It was longer than necessary. A reasonable length of time for the duration of the restraint would have been a period of 15 months at the most.",
            "date": "2008-07-30",
            "anchor": "https://openagreements.org/practice-guides/non-compete/au/northern-territory#src-oamps-fifteen-months"
          },
          {
            "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/northern-territory#src-lindner-area-too-wide"
          },
          {
            "id": "sandrey-limited-restriction",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "Mental Illness Fellowship of Australia (NT) Inc v Sandrey",
            "citation": "Mental Illness Fellowship of Australia (NT) Inc v Sandrey [2025] NTSC 57 (Kelly J).",
            "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/nt/NTSC/2025/57.html",
            "proposition": "The judge indicated, without needing to decide the point because no breach was proved, that a six-month client-solicitation restraint with no defined geographical limitation did not go beyond what was reasonable to protect the employer's goodwill, given the limited nature of the restriction.",
            "verbatimQuote": "It does not have a defined geographical limitation. Nevertheless, given the nature of the business being conducted by MIFANT, and the limited nature of the restriction, I do not consider the clause goes beyond what is reasonable to protect the good will of MIFANT in the circumstances.",
            "date": "2025-08-12",
            "anchor": "https://openagreements.org/practice-guides/non-compete/au/northern-territory#src-sandrey-limited-restriction"
          }
        ]
      },
      {
        "slug": "garden-leave",
        "label": "Do paid restraints and garden leave help?",
        "heading": "Do paid restraints, garden leave, and fresh consideration help in the Northern Territory?",
        "answerText": "They can strengthen an employer's position, but no Northern Territory decision squarely addresses garden leave or a restraint the employee was paid to accept, so the safe assumption is that the ordinary reasonableness framework governs without any special discount. The covenant is judged as at the moment it was agreed — the question is whether it was a reasonable one for the parties to agree to at the outset, on the best estimate they could then make of the future.",
        "sources": [
          {
            "id": "oamps-best-estimate",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "OAMPS Insurance Brokers Limited v Shackcloth",
            "citation": "OAMPS Insurance Brokers Limited v Shackcloth [2008] NTSC 29 (Southwood J), citing Lindner v Murdock's Garage (1950) 83 CLR 628 and Adamson v NSW Rugby League Ltd (1991) 31 FCR 242 per Gummow J.",
            "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/nt/NTSC/2008/29.html",
            "proposition": "The reasonableness question is whether the covenant was a reasonable one for the parties to agree to at the outset of the service on the best estimate they could then make of the future.",
            "verbatimQuote": "The question is whether the covenant was a reasonable one for the parties to agree to at the outset of the service on the best estimate which they could then make of the future",
            "date": "2008-07-30",
            "anchor": "https://openagreements.org/practice-guides/non-compete/au/northern-territory#src-oamps-best-estimate"
          },
          {
            "id": "sandrey-variation-enforceable",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "Mental Illness Fellowship of Australia (NT) Inc v Sandrey",
            "citation": "Mental Illness Fellowship of Australia (NT) Inc v Sandrey [2025] NTSC 57 (Kelly J).",
            "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/nt/NTSC/2025/57.html",
            "proposition": "A six-month client-solicitation restraint introduced by a signed mid-employment variation was one the judge said she would have found enforceable, although the point did not arise because the employer failed to prove any breach.",
            "verbatimQuote": "If it were necessary for me to make a finding on that issue, I would have found the clause enforceable.",
            "date": "2025-08-12",
            "anchor": "https://openagreements.org/practice-guides/non-compete/au/northern-territory#src-sandrey-variation-enforceable"
          }
        ]
      },
      {
        "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. No staged Northern Territory decision decides that point, so treat it as a general principle a Territory court may apply rather than settled local law.",
        "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/northern-territory#src-lindner-onus"
          },
          {
            "id": "oamps-dismissal-justified",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "OAMPS Insurance Brokers Limited v Shackcloth",
            "citation": "OAMPS Insurance Brokers Limited v Shackcloth [2008] NTSC 29 (Southwood J).",
            "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/nt/NTSC/2008/29.html",
            "proposition": "The employer was held justified in summarily dismissing the employee for serious misconduct, yet its claim to enforce the restraint of trade clause still failed because the clause was unreasonable and void.",
            "verbatimQuote": "I find that the plaintiff was justified in summarily dismissing the defendant from his employment with the plaintiff.",
            "date": "2008-07-30",
            "anchor": "https://openagreements.org/practice-guides/non-compete/au/northern-territory#src-oamps-dismissal-justified"
          }
        ]
      },
      {
        "slug": "tolling",
        "label": "Does the restriction pause or extend during a breach?",
        "heading": "Does a Northern 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 Northern Territory authority holds that a restraint period tolls — pauses and then resumes — while a former employee is in breach or while litigation runs. Validity is decided as at the date of the agreement, which sits uneasily with a clause that purports to lengthen the restraint automatically depending on the employee's later conduct.",
        "sources": [
          {
            "id": "henderson-tested-at-date",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "Henderson v Purairclean Pty Ltd",
            "citation": "Henderson v Purairclean Pty Ltd [2013] NTSC 29 (Riley CJ).",
            "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/nt/NTSC/2013/29.html",
            "proposition": "The validity of a restraint must generally be decided as at the date of the agreement in which it is imposed.",
            "verbatimQuote": "Generally speaking the validity of the restraint must be decided as at the date of the agreement in which it is imposed.",
            "date": "2013-06-21",
            "anchor": "https://openagreements.org/practice-guides/non-compete/au/northern-territory#src-henderson-tested-at-date"
          }
        ]
      },
      {
        "slug": "contractors-and-sale",
        "label": "Do the rules differ for contractors and business sales?",
        "heading": "Do Northern Territory restraint rules differ for contractors and business sales?",
        "answerText": "Yes, in different directions. Restraints outside the employment relationship are assessed under the same restraint-of-trade doctrine — the same legitimate-interest requirement and no-wider-than-necessary test — but the commercial context matters: the Territory's franchise case treated the franchise relationship as supplying a sound basis for a restraint at the date the agreement was made and enforced the covenant for twelve months. Restraints given by the seller of a business are judged more leniently still, 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/northern-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/northern-territory#src-lindner-sale-more-easily"
          },
          {
            "id": "henderson-basis-at-entry",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "Henderson v Purairclean Pty Ltd",
            "citation": "Henderson v Purairclean Pty Ltd [2013] NTSC 29 (Riley CJ).",
            "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/nt/NTSC/2013/29.html",
            "proposition": "At the time the franchise agreement was entered into there was a basis for imposing a restraint of trade, given the established business whose benefit the franchise took.",
            "verbatimQuote": "In my opinion there was, at the time the franchise agreement was entered into, a basis for imposing a restraint of trade.",
            "date": "2013-06-21",
            "anchor": "https://openagreements.org/practice-guides/non-compete/au/northern-territory#src-henderson-basis-at-entry"
          },
          {
            "id": "henderson-franchise-upheld",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "Henderson v Purairclean Pty Ltd",
            "citation": "Henderson v Purairclean Pty Ltd [2013] NTSC 29 (Riley CJ).",
            "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/nt/NTSC/2013/29.html",
            "proposition": "The restraint clauses in the franchise agreements were valid and enforceable for the identified area and for twelve months from termination, and the former franchisees breached the restraint by carrying on the same business.",
            "verbatimQuote": "The restraint of trade clauses in both the Jaymak Franchise Agreement and the Purairclean Franchise Agreement are valid and enforceable for the identified area and for the period of 12 months from the date of termination of the franchise.",
            "date": "2013-06-21",
            "anchor": "https://openagreements.org/practice-guides/non-compete/au/northern-territory#src-henderson-franchise-upheld"
          }
        ]
      },
      {
        "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 Northern 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": "oamps-still-governs",
            "authorityType": "case-law",
            "tier": "primary-source-backed",
            "title": "OAMPS Insurance Brokers Limited v Shackcloth",
            "citation": "OAMPS Insurance Brokers Limited v Shackcloth [2008] NTSC 29 (Southwood J).",
            "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/nt/NTSC/2008/29.html",
            "proposition": "Under the common-law restraint-of-trade doctrine that currently governs in the Northern Territory, unreasonable restraints of trade are prohibited and contractual provisions amounting to an unreasonable restraint are void and unenforceable.",
            "verbatimQuote": "The common law prohibits unreasonable restraints of trade. Contractual provisions which amount to an unreasonable restraint of trade are void and unenforceable.",
            "date": "2008-07-30",
            "anchor": "https://openagreements.org/practice-guides/non-compete/au/northern-territory#src-oamps-still-governs"
          }
        ]
      }
    ]
  }
}