{ "type": "practice-guide", "canonical": "https://openagreements.org/practice-guides/non-compete/au/victoria", "links": [ { "rel": "self", "href": "https://openagreements.org/practice-guides/non-compete/au/victoria.json", "type": "application/json" }, { "rel": "alternate", "href": "https://openagreements.org/practice-guides/non-compete/au/victoria", "type": "text/html" }, { "rel": "alternate", "href": "https://openagreements.org/practice-guides/non-compete/au/victoria/markdown", "type": "text/markdown" }, { "rel": "alternate", "href": "https://openagreements.org/practice-guides/non-compete/au/victoria/json", "type": "application/json" } ], "data": { "topic": "non-compete", "state": "victoria", "frontmatter": { "title": "Non-Compete Enforceability in Victoria", "description": "In Victoria 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; Victoria has no statutory read-down power, so courts apply the common-law blue-pencil rule only — they can delete severable words but cannot rewrite an overbroad clause, and as Just Group v Peck shows, even an elaborately drafted restraint can fail because severance is not a safety net.", "state": "Victoria, Australia", "country_code": "AU", "lastReviewed": "2026-06-10", "license": "CC BY 4.0", "authors": [ "steven-obiajulu" ], "summary": { "enforceability": "reasonable", "bottomLine": "A Victorian 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, so a court can only strike out grammatically severable words under the blue-pencil rule, and a carefully drafted multi-limb restraint that severance cannot save fails entirely.", "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; 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 and tested as at the date of the contract, and longer periods and wider areas attract closer scrutiny.", "noticeRequirement": "None", "saleOfBusiness": "Sale covenants judged less strictly than employee restraints", "customerNonSolicit": "Restraint-of-trade reasonableness; customer connection protectable but void if wider than necessary" }, "about": [ "Victoria non-compete agreements", "Victoria restraint of trade clauses", "Victoria blue-pencil severance restraint", "cascading restraint clause Victoria", "Victoria no statutory read-down restraint of trade", "Just Group v Peck restraint severance", "Wallis Nominees v Pickett customer connection", "Crowe Horwath v Loone repudiation restraint", "Victoria garden leave non-compete", "Australia proposed non-compete ban" ], "eyebrow": "Victoria · Australia Law Practice Guide" }, "questions": [ { "slug": "enforceability", "label": "Are non-competes enforceable?", "heading": "Are employee non-competes enforceable in Victoria?", "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 void as contrary to public policy unless the employer shows it goes no further than is reasonably necessary to protect a legitimate business interest. The starting point is presumptive invalidity, and the burden sits with the employer to justify the clause.", "sources": [ { "id": "just-presumed-void", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Just Group Ltd v Peck", "citation": "Just Group Ltd v Peck [2016] VSCA 334 (the Court).", "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VSCA/2016/334.html", "proposition": "Just Group Ltd v Peck supports the rule that a contractual restraint of trade is presumed void as contrary to public policy unless special circumstances rebut the presumption.", "verbatimQuote": "A term in a contract, which is a restraint of trade ('a restraint clause'), is presumed to be void as contrary to public policy.", "date": "2016-12-20", "anchor": "https://openagreements.org/practice-guides/non-compete/au/victoria#src-just-presumed-void" }, { "id": "lindner-prima-facie", "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 Kitto J).", "url": "https://www.hcourt.gov.au/sites/default/files/eresources/1950/HCA/48.pdf", "proposition": "All restraints of trade are presumptively invalid and may be upheld only if the party enforcing them shows they are reasonably necessary to protect a legitimate interest and not contrary to the public interest.", "verbatimQuote": "Any contractual restraint of trade is prima facie unlawful and invalid.", "date": "1950-09-29", "anchor": "https://openagreements.org/practice-guides/non-compete/au/victoria#src-lindner-prima-facie" }, { "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/victoria#src-lindner-onus" }, { "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/victoria#src-lindner-face-competition" } ] }, { "slug": "court-narrowing", "label": "Can a court narrow an overbroad clause?", "heading": "Can a Victorian court narrow an overbroad non-compete?", "answerText": "Only by deleting severable words — not by reading the clause down or rewriting it. Victoria has no statute giving a court power to enforce an overbroad restraint to a reasonable extent. The only narrowing tool is the common-law blue-pencil rule: a court can strike out grammatically severable words, but it cannot read an unduly wide clause down to preserve its validity. Adding words to confine a restraint would remake the clause rather than enforce it, which a court will not do.", "sources": [ { "id": "just-no-readdown", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Just Group Ltd v Peck", "citation": "Just Group Ltd v Peck [2016] VSCA 334 (the Court).", "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VSCA/2016/334.html", "proposition": "A court has no power to read an unduly wide restraint down to preserve its validity; the common-law tool is excision of severable words, not narrowing the clause.", "verbatimQuote": "However, it is not permissible for a court to read down an unduly wide clause in order to preserve its validity.", "date": "2016-12-20", "anchor": "https://openagreements.org/practice-guides/non-compete/au/victoria#src-just-no-readdown" }, { "id": "just-rewrite", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Just Group Ltd v Peck", "citation": "Just Group Ltd v Peck [2016] VSCA 334 (the Court).", "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VSCA/2016/334.html", "proposition": "Reading an overbroad restraint down in the way the employer proposed would impermissibly rewrite the clause to preserve its validity rather than give effect to its meaning.", "verbatimQuote": "to read down the first limb, in the manner suggested, would be to, impermissibly, rewrite the restraint clause in order to preserve its validity", "date": "2016-12-20", "anchor": "https://openagreements.org/practice-guides/non-compete/au/victoria#src-just-rewrite" }, { "id": "just-first-limb-invalid", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Just Group Ltd v Peck", "citation": "Just Group Ltd v Peck [2016] VSCA 334 (the Court).", "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VSCA/2016/334.html", "proposition": "The first limb of the restraint exceeded what was necessary to protect the employer's legitimate interests and was therefore invalid.", "verbatimQuote": "The first limb of the restraint clause exceeds what is necessary for the protection of the legitimate interests of Just Group and is therefore invalid.", "date": "2016-12-20", "anchor": "https://openagreements.org/practice-guides/non-compete/au/victoria#src-just-first-limb-invalid" }, { "id": "just-no-new-agreement", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Just Group Ltd v Peck", "citation": "Just Group Ltd v Peck [2016] VSCA 334 (the Court).", "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VSCA/2016/334.html", "proposition": "A court will not sever an overbroad restraint where doing so would amount to making a new agreement for the parties.", "verbatimQuote": "It is not for the Court to make a new agreement for the parties.", "date": "2016-12-20", "anchor": "https://openagreements.org/practice-guides/non-compete/au/victoria#src-just-no-new-agreement" }, { "id": "just-dismiss", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Just Group Ltd v Peck", "citation": "Just Group Ltd v Peck [2016] VSCA 334 (the Court).", "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VSCA/2016/334.html", "proposition": "The Court of Appeal granted leave to appeal but dismissed the appeal, leaving the unreasonable restraint unenforced and unsevered.", "verbatimQuote": "We will grant leave to appeal and dismiss the appeal.", "date": "2016-12-20", "anchor": "https://openagreements.org/practice-guides/non-compete/au/victoria#src-just-dismiss" } ] }, { "slug": "cascading-clauses", "label": "Are cascading or ladder clauses valid?", "heading": "Are cascading or ladder restraint clauses valid in Victoria?", "answerText": "They are a common drafting device, but they are not a guarantee. A cascading clause sets out a menu of progressively narrower combinations of period and area, each expressed as a separate, severable restraint, so that if the widest is unreasonable a narrower one can still stand. Describing that device, the Court of Appeal in Wallis Nominees (Computing) Pty Ltd v Pickett explained the commonly used cascading form precisely in order to point out that the clause before it was NOT drafted that way — its supposed alternative was not a stand-alone option but referred back to the first option, so the clause was not severable. The device works only if each rung is genuinely independent and capable of being struck out without rewriting the rest, and only if each rung is itself reasonable. Where the words that make a restraint unreasonable cannot simply be crossed out without changing the meaning of what remains, severance fails and the restraint falls.", "sources": [ { "id": "wallis-cascading", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Wallis Nominees (Computing) Pty Ltd v Pickett", "citation": "Wallis Nominees (Computing) Pty Ltd v Pickett [2013] VSCA 24 (Warren CJ and Davies AJA).", "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VSCA/2013/24.html", "proposition": "In describing what a cascading clause is — the commonly used form that starts with the broadest possible restraint and then provides increasingly narrow alternatives, each one standing alone — the Court of Appeal observed that the clause before it was NOT in that form, because its alternative option was not stand-alone but referred back to the first option.", "verbatimQuote": "the commonly used form of a cascading clause where it starts with the broadest possible restraint then provides increasingly narrow alternatives, each one standing alone.", "date": "2013-02-20", "anchor": "https://openagreements.org/practice-guides/non-compete/au/victoria#src-wallis-cascading" }, { "id": "wallis-remove-not-rewrite", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Wallis Nominees (Computing) Pty Ltd v Pickett", "citation": "Wallis Nominees (Computing) Pty Ltd v Pickett [2013] VSCA 24 (Warren CJ and Davies AJA).", "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VSCA/2013/24.html", "proposition": "Severance requires that the impugned words can simply be crossed out with a blue pen; a court can remove words from a restraint clause but cannot rewrite it.", "verbatimQuote": "a court can remove words from a restraint clause but not rewrite it.", "date": "2013-02-20", "anchor": "https://openagreements.org/practice-guides/non-compete/au/victoria#src-wallis-remove-not-rewrite" }, { "id": "just-no-new-agreement-cascade", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Just Group Ltd v Peck", "citation": "Just Group Ltd v Peck [2016] VSCA 334 (the Court).", "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VSCA/2016/334.html", "proposition": "A court will not sever an overbroad restraint where doing so would amount to making a new agreement for the parties, so a multi-limb clause is not a guaranteed safety net.", "verbatimQuote": "It is not for the Court to make a new agreement for the parties.", "date": "2016-12-20", "anchor": "https://openagreements.org/practice-guides/non-compete/au/victoria#src-just-no-new-agreement-cascade" }, { "id": "just-no-readdown-cascade", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Just Group Ltd v Peck", "citation": "Just Group Ltd v Peck [2016] VSCA 334 (the Court).", "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VSCA/2016/334.html", "proposition": "A court has no power to read an unduly wide restraint down to preserve its validity, so each rung of a cascade must be reasonable on its own.", "verbatimQuote": "However, it is not permissible for a court to read down an unduly wide clause in order to preserve its validity.", "date": "2016-12-20", "anchor": "https://openagreements.org/practice-guides/non-compete/au/victoria#src-just-no-readdown-cascade" } ] }, { "slug": "legitimate-interest", "label": "What interest must an employer protect?", "heading": "What legitimate interest must an employer show to enforce a Victorian non-compete?", "answerText": "A protectable business interest — not a mere wish to avoid competition. An employer cannot restrain a former employee simply because the new employer is a rival; it must be prepared to face that competition if it comes. The interests the law recognises are the employer's trade connection with its customers and the goodwill of the business — together with genuine trade secrets and confidential information. In Wallis Nominees (Computing) Pty Ltd v Pickett the Court of Appeal found that the employer did have a legitimate interest in its goodwill in its customers — its customer connections, which may include knowledge of and influence over its customers — even though it went on to hold the particular clause unreasonable. An employee's own general skill, experience, and know-how are the employee's to use.", "sources": [ { "id": "lindner-face-competition-interest", "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 such as trade connection or confidential information 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/victoria#src-lindner-face-competition-interest" }, { "id": "wallis-customer-connection", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Wallis Nominees (Computing) Pty Ltd v Pickett", "citation": "Wallis Nominees (Computing) Pty Ltd v Pickett [2013] VSCA 24 (Warren CJ and Davies AJA).", "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VSCA/2013/24.html", "proposition": "The interest the employer (DWS) advanced was its goodwill in its customers — its customer connections, which may include knowledge of and influence over its customers — and the Court of Appeal found DWS did have a legitimate interest of that kind, though it ultimately held the clause unreasonable in extent and duration.", "verbatimQuote": "The legitimate interest alleged by DWS is its goodwill in its customers, the essence of which is its customer connections which may include knowledge of, and influence over, its customers.", "date": "2013-02-20", "anchor": "https://openagreements.org/practice-guides/non-compete/au/victoria#src-wallis-customer-connection" }, { "id": "wallis-test", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Wallis Nominees (Computing) Pty Ltd v Pickett", "citation": "Wallis Nominees (Computing) Pty Ltd v Pickett [2013] VSCA 24 (Warren CJ and Davies AJA).", "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VSCA/2013/24.html", "proposition": "Even where a legitimate interest exists, the restraint must do no more than is reasonably necessary to protect that interest.", "verbatimQuote": "The test is whether the restraint does more than what is reasonably necessary to protect the employer's legitimate interest.", "date": "2013-02-20", "anchor": "https://openagreements.org/practice-guides/non-compete/au/victoria#src-wallis-test" }, { "id": "wallis-conclude-unreasonable", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Wallis Nominees (Computing) Pty Ltd v Pickett", "citation": "Wallis Nominees (Computing) Pty Ltd v Pickett [2013] VSCA 24 (Warren CJ and Davies AJA).", "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VSCA/2013/24.html", "proposition": "A restraint can be void even where a legitimate interest exists, if it goes further than necessary; here the clause was unreasonable in both extent and duration.", "verbatimQuote": "we conclude that while DWS did have a legitimate interest in restraining Mr Pickett, the clause was unreasonable having regard to both its extent and to its duration.", "date": "2013-02-20", "anchor": "https://openagreements.org/practice-guides/non-compete/au/victoria#src-wallis-conclude-unreasonable" } ] }, { "slug": "reasonableness-factors", "label": "How long and how wide can it be?", "heading": "How long and how wide can a Victorian 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 seniority and actual customer influence. The Court of Appeal has held that whether a legitimate interest exists is assessed as at the date the contract was entered into, not by hindsight, and as a general matter the restraint's reasonableness is likewise tested by reference to that date rather than to how things later turned out. A geographic area wider than the employer's business reasonably requires, or a period longer than is needed to protect the interest, is likely to be unreasonable.", "sources": [ { "id": "wallis-assessed-at-time", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Wallis Nominees (Computing) Pty Ltd v Pickett", "citation": "Wallis Nominees (Computing) Pty Ltd v Pickett [2013] VSCA 24 (Warren CJ and Davies AJA).", "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VSCA/2013/24.html", "proposition": "The assessment of whether a legitimate interest exists is made at the time the contract is entered into, not with hindsight.", "verbatimQuote": "The assessment of whether a legitimate interest exists is to be assessed at the time the contract is being entered into.", "date": "2013-02-20", "anchor": "https://openagreements.org/practice-guides/non-compete/au/victoria#src-wallis-assessed-at-time" }, { "id": "lindner-area-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/victoria#src-lindner-area-wide" }, { "id": "wallis-conclude-unreasonable-scope", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Wallis Nominees (Computing) Pty Ltd v Pickett", "citation": "Wallis Nominees (Computing) Pty Ltd v Pickett [2013] VSCA 24 (Warren CJ and Davies AJA).", "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VSCA/2013/24.html", "proposition": "A restraint can be unreasonable in both extent and duration even where a legitimate interest exists, so scope and length each have to be justified.", "verbatimQuote": "we conclude that while DWS did have a legitimate interest in restraining Mr Pickett, the clause was unreasonable having regard to both its extent and to its duration.", "date": "2013-02-20", "anchor": "https://openagreements.org/practice-guides/non-compete/au/victoria#src-wallis-conclude-unreasonable-scope" }, { "id": "lindner-onus-scope", "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, including its area and duration.", "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/victoria#src-lindner-onus-scope" } ] }, { "slug": "garden-leave", "label": "Do paid restraints and garden leave help?", "heading": "Do paid restraints, garden leave, and fresh consideration help in Victoria?", "answerText": "They can strengthen an employer's position, but as a general matter they do not displace the reasonableness requirement. As a general principle of restraint-of-trade law, a restraint the employee is paid to observe can weigh against the argument that the clause stops the employee earning a living, and garden leave — where the employee stays employed and paid through the notice period while bound by duties of fidelity — is generally assessed more flexibly than a post-termination restraint. These are general principles rather than rules drawn from any on-point Victorian decision in the cases discussed here, and none of these features converts an overbroad covenant into a reasonable one: the restraint must still do no more than is reasonably necessary to protect a legitimate interest.", "sources": [ { "id": "wallis-test-garden", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Wallis Nominees (Computing) Pty Ltd v Pickett", "citation": "Wallis Nominees (Computing) Pty Ltd v Pickett [2013] VSCA 24 (Warren CJ and Davies AJA).", "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VSCA/2013/24.html", "proposition": "Paid restraints and garden leave do not displace the core test: the restraint must do no more than is reasonably necessary to protect the employer's legitimate interest.", "verbatimQuote": "The test is whether the restraint does more than what is reasonably necessary to protect the employer's legitimate interest.", "date": "2013-02-20", "anchor": "https://openagreements.org/practice-guides/non-compete/au/victoria#src-wallis-test-garden" }, { "id": "wallis-assessed-at-time-garden", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Wallis Nominees (Computing) Pty Ltd v Pickett", "citation": "Wallis Nominees (Computing) Pty Ltd v Pickett [2013] VSCA 24 (Warren CJ and Davies AJA).", "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VSCA/2013/24.html", "proposition": "Whether a legitimate interest exists is assessed at the time the contract is entered into, which matters for restraints introduced mid-employment.", "verbatimQuote": "The assessment of whether a legitimate interest exists is to be assessed at the time the contract is being entered into.", "date": "2013-02-20", "anchor": "https://openagreements.org/practice-guides/non-compete/au/victoria#src-wallis-assessed-at-time-garden" } ] }, { "slug": "employer-breach", "label": "What if the employer breached first?", "heading": "What if the employer repudiated the contract or wrongfully dismissed the employee?", "answerText": "The restraint may fall away. Where the employer's own wrongful conduct ends the employment, a court will generally not enforce a post-employment restraint against the employee. The Court of Appeal has stated that, over more than a century, courts have held a restraint clause unenforceable against an employee whose employment ends through the employer's wrongful conduct — including wrongful dismissal or the employee's acceptance of the employer's repudiatory conduct.", "sources": [ { "id": "crowe-holding", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Crowe Horwath (Aust) Pty Ltd v Loone", "citation": "Crowe Horwath (Aust) Pty Ltd v Loone [2017] VSCA 181 (Ashley, Priest and Beach JJA).", "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VSCA/2017/181.html", "proposition": "A restraint clause is not enforceable against an employee whose employment ends through the employer's wrongful conduct, whether wrongful dismissal or the employee's acceptance of the employer's repudiatory conduct.", "verbatimQuote": "A series of decisions in the High Court, and in courts of high authority in England and Canada, have stated, over the course of more than a century, that a restraint clause is not enforceable against an employee whose employment ends by the employer's wrongful conduct — whether it be wrongful dismissal or the employee's acceptance of the employer's repudiatory conduct.", "date": "2017-07-07", "anchor": "https://openagreements.org/practice-guides/non-compete/au/victoria#src-crowe-holding" }, { "id": "crowe-equity", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Crowe Horwath (Aust) Pty Ltd v Loone", "citation": "Crowe Horwath (Aust) Pty Ltd v Loone [2017] VSCA 181 (Ashley, Priest and Beach JJA), quoting Gibbs J in Geraghty v Minter (1979) 142 CLR 177.", "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VSCA/2017/181.html", "proposition": "A party seeking equitable relief by injunction to enforce a restraint must itself have performed its part of the bargain — he who comes to equity must do equity.", "verbatimQuote": "He who comes to equity must do equity", "date": "2017-07-07", "anchor": "https://openagreements.org/practice-guides/non-compete/au/victoria#src-crowe-equity" }, { "id": "crowe-no-reported", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Crowe Horwath (Aust) Pty Ltd v Loone", "citation": "Crowe Horwath (Aust) Pty Ltd v Loone [2017] VSCA 181 (Ashley, Priest and Beach JJA).", "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VSCA/2017/181.html", "proposition": "No reported case in a superior court in Australia or England has held a restraint clause enforceable against a former employee where the employment ended through the employer's wrongful conduct.", "verbatimQuote": "there is no reported case in a court of superior jurisdiction in Australia or England which has decided that a restraint clause is enforceable against a former employee in such circumstances.", "date": "2017-07-07", "anchor": "https://openagreements.org/practice-guides/non-compete/au/victoria#src-crowe-no-reported" }, { "id": "lindner-onus-breach", "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 the restriction on the employee's freedom to work is reasonable, before any question of the employer's own breach arises.", "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/victoria#src-lindner-onus-breach" } ] }, { "slug": "tolling", "label": "Does the restriction pause or extend during a breach?", "heading": "Does a Victorian 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 settled Victorian authority holds that a restraint period tolls — pauses and then resumes — while a former employee is in breach or while litigation runs. Because the existence of a legitimate interest is assessed as at the date the contract was entered into, and reasonableness is generally tested by reference to that date, a clause that automatically lengthens the restraint depending on the employee's later conduct may sit uneasily with the way Victorian courts test validity.", "sources": [ { "id": "wallis-assessed-at-time-tolling", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Wallis Nominees (Computing) Pty Ltd v Pickett", "citation": "Wallis Nominees (Computing) Pty Ltd v Pickett [2013] VSCA 24 (Warren CJ and Davies AJA).", "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VSCA/2013/24.html", "proposition": "Whether a legitimate interest exists is assessed at the time the contract is entered into, which may sit in tension with a clause that automatically extends the restraint based on the employee's later breach.", "verbatimQuote": "The assessment of whether a legitimate interest exists is to be assessed at the time the contract is being entered into.", "date": "2013-02-20", "anchor": "https://openagreements.org/practice-guides/non-compete/au/victoria#src-wallis-assessed-at-time-tolling" }, { "id": "just-no-readdown-tolling", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Just Group Ltd v Peck", "citation": "Just Group Ltd v Peck [2016] VSCA 334 (the Court).", "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VSCA/2016/334.html", "proposition": "A court will not read an unduly wide restraint down to preserve its validity; on one view that confinement of a covenant to what is reasonably necessary sits awkwardly with open-ended or self-extending restraints, though Just Group did not decide the tolling question.", "verbatimQuote": "However, it is not permissible for a court to read down an unduly wide clause in order to preserve its validity.", "date": "2016-12-20", "anchor": "https://openagreements.org/practice-guides/non-compete/au/victoria#src-just-no-readdown-tolling" } ] }, { "slug": "customer-non-solicitation", "label": "How are customer non-solicits treated?", "heading": "How does Victoria treat customer non-solicitation covenants?", "answerText": "Victoria recognises an employer's goodwill in, and connection with, its customers as a legitimate interest a non-solicit may protect, but the restraint is void if it goes wider than that interest reasonably requires.", "sources": [ { "id": "vic-cust-legitimate-interest", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Wallis Nominees (Computing) Pty Ltd v Pickett", "citation": "Wallis Nominees (Computing) Pty Ltd v Pickett [2013] VSCA 24 at [20].", "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VSCA/2013/24.html", "proposition": "An employer's goodwill in its customers, expressed as its customer connections, is a legitimate interest a restraint may protect.", "verbatimQuote": "The legitimate interest alleged by DWS is its goodwill in its customers, the essence of which is its customer connections which may include knowledge of, and influence over, its customers.", "date": "2013-02-20", "anchor": "https://openagreements.org/practice-guides/non-compete/au/victoria#src-vic-cust-legitimate-interest" }, { "id": "vic-cust-void-if-wider", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Wallis Nominees (Computing) Pty Ltd v Pickett", "citation": "Wallis Nominees (Computing) Pty Ltd v Pickett [2013] VSCA 24 at [19].", "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VSCA/2013/24.html", "proposition": "Even where the legitimate customer-connection interest exists, the restraint is void if unreasonable in extent or duration.", "verbatimQuote": "we conclude that while DWS did have a legitimate interest in restraining Mr Pickett, the clause was unreasonable having regard to both its extent and to its duration.", "date": "2013-02-20", "anchor": "https://openagreements.org/practice-guides/non-compete/au/victoria#src-vic-cust-void-if-wider" } ] }, { "slug": "contractors-and-sale", "label": "Do the rules differ for contractors and business sales?", "heading": "Do Victorian restraint rules differ for contractors and business sales?", "answerText": "In some respects, yes. Restraints on independent contractors are assessed under the same restraint-of-trade reasonableness doctrine as employee covenants; what matters is the substance of the interest at stake rather than the label put on the relationship. Restraints given by the seller of a business are judged more leniently than employee restraints, because a buyer is entitled to protect the goodwill it paid for and the parties bargain on more equal terms.", "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, dissenting).", "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/victoria#src-lindner-sale-distinction" }, { "id": "lindner-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, dissenting).", "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/victoria#src-lindner-more-easily" }, { "id": "wallis-test-contractors", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Wallis Nominees (Computing) Pty Ltd v Pickett", "citation": "Wallis Nominees (Computing) Pty Ltd v Pickett [2013] VSCA 24 (Warren CJ and Davies AJA).", "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VSCA/2013/24.html", "proposition": "The same reasonableness test governs whatever the label of the relationship: the restraint must do no more than is reasonably necessary to protect the legitimate interest.", "verbatimQuote": "The test is whether the restraint does more than what is reasonably necessary to protect the employer's legitimate interest.", "date": "2013-02-20", "anchor": "https://openagreements.org/practice-guides/non-compete/au/victoria#src-wallis-test-contractors" } ] }, { "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 Victoria. According to Australian Government Treasury material and law-firm commentary, the Government has announced 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 consultation on the design under way, the reform expected to be legislated during 2026 and to take effect from 2027, and 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": "just-presumed-void-reform", "authorityType": "case-law", "tier": "primary-source-backed", "title": "Just Group Ltd v Peck", "citation": "Just Group Ltd v Peck [2016] VSCA 334 (the Court).", "url": "https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VSCA/2016/334.html", "proposition": "Until any federal ban is enacted, the common-law restraint-of-trade doctrine — under which a restraint is presumed void unless shown to be reasonable — continues to govern the enforceability of non-competes in Victoria.", "verbatimQuote": "A term in a contract, which is a restraint of trade ('a restraint clause'), is presumed to be void as contrary to public policy.", "date": "2016-12-20", "anchor": "https://openagreements.org/practice-guides/non-compete/au/victoria#src-just-presumed-void-reform" } ] } ] } }