A Restraint Clause Is Only As Good As the Injunction Enforcing It
A former employee started at your competitor three days ago. They have taken client contacts, industry relationships, and institutional knowledge that took years to build. You have a restraint clause in their contract. The question is not whether you have a right — it is whether you can stop the damage before it becomes permanent. That means an urgent injunction, and urgent means now.
Restraint breach? Every day without an order is another day of compounding damage.
Why Speed Is the Whole Game
Courts considering applications for injunctive relief look at, among other things, whether the applicant moved promptly on becoming aware of the breach. A delay of two or three weeks between discovering the breach and filing an application can be fatal to the urgent component of your relief, even where the underlying restraint is perfectly enforceable. Acting slowly signals to the court that the situation is not genuinely urgent, and undermines the argument that damages would not be an adequate remedy.
Practically, delay also allows the breach to compound. Clients transfer. Staff are poached. Confidential pricing and methodology information is used to undercut existing work. Every day between discovery of the breach and obtaining an order is a day the damage deepens and becomes harder to reverse.
What You Need to Establish for an Interlocutory Injunction
An interlocutory injunction to restrain a breach of a non-compete or non-solicitation clause is not available automatically. You must satisfy the court of three things, drawn from the principles in American Cyanamid Co v Ethicon Ltd [1975] AC 396 as applied in Australia.
1. A serious question to be tried
You do not have to prove your restraint will succeed at final hearing. You need to show there is a genuine, arguable case — that the restraint clause is not obviously unenforceable, that a breach has occurred or is threatened, and that you have standing to seek relief. This is generally the lowest bar, but a restraint that is plainly overbroad on its face will fail here.
2. Balance of convenience favours granting the order
The court weighs the inconvenience of granting the order against the inconvenience of refusing it. For a former employee, this typically means assessing the harm to their ability to earn income against the harm to the employer from continued breach. Courts are generally more willing to grant an injunction where the evidence shows ongoing solicitation of clients or disclosure of genuinely confidential information, and less willing where the employer is simply trying to prevent a former employee from working in their industry entirely.
3. Damages would not be an adequate remedy
This is often the hardest element to establish convincingly. You need to show that if the breach continues, the loss to your business cannot be fully compensated by a damages award. Client relationships, goodwill, and the trust built with key accounts are exactly the kind of loss courts accept as difficult to quantify and therefore inadequately addressed by money alone. The stronger your evidence of the specific, unquantifiable harm, the better.
What You Need Ready Before You File
Injunction applications, particularly urgent ex parte applications, require precise, affidavit-supported evidence. Judges granting ex parte relief rely entirely on what you put before them, because the other side has not yet been heard. The duty of full and frank disclosure is strict: if there are weaknesses in your case or arguments the other side would raise, you must put them before the court yourself.
- A copy of the employment agreement containing the restraint clause, clearly setting out the scope, geographic area, and duration.
- Specific, dated evidence of the breach: communications showing solicitation of clients, evidence the former employee has started with a competitor, any statements from clients who have been approached.
- Evidence of the termination: how it occurred, whether it was valid, and importantly, whether the contract made the restraints contingent on the termination not being caused by your own breach.
- Evidence of loss: client relationships at risk, revenue likely to be lost, and why damages cannot adequately compensate that loss.
- An undertaking as to damages: you must commit to compensating the defendant for any loss caused by the injunction if the restraint is ultimately found unenforceable or the injunction was wrongly granted.
The Undertaking as to Damages: The Risk You Are Taking On
When a court grants an interlocutory injunction, it almost always requires the applicant to give an undertaking as to damages. This means that if the injunction later turns out to have been wrongly granted, whether because the restraint was unenforceable, or because there was no breach, you are liable to compensate the restrained party for the losses they suffered while subject to the order. In a case where a senior employee is prevented from working for several months before the underlying dispute resolves, that liability can be substantial.
This is not a reason to avoid seeking an injunction where the facts genuinely support it. It is a reason to assess the strength of your case honestly before committing to urgent proceedings, and to be precise in what you are asking the court to restrain rather than seeking the broadest possible order.
If You Are the Former Employee Facing an Injunction Application
Where an employer applies ex parte without notice, the injunction can be granted before you are even aware of the proceedings. Once served, you should seek advice immediately. The key questions are whether the restraint clause is actually enforceable, whether the employer’s evidence of breach is accurate, and whether the balance of convenience genuinely favours the order given the specific constraints it imposes on your ability to earn income.
A return date is set shortly after an ex parte order, at which you have the opportunity to be heard. This is your window to challenge the basis for the injunction and seek its variation or discharge.
Whether you are seeking or facing an urgent injunction, the first 72 hours matter most.
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Frequently Asked Questions
Q: How quickly can an injunction be obtained?
A: An urgent injunction can be obtained ex parte, without notice to the other side, on the same day or the following day in serious cases, provided the application is properly prepared and the evidence is compelling. The application is usually followed shortly by a contradictory hearing where both parties are heard.
Q: Does delay in applying for an injunction kill my case?
A: Not necessarily, but it weakens it materially. Courts treat delay as evidence that the matter is not as urgent as claimed, or that damages would in fact be an adequate remedy. If you discovered the breach weeks ago and are only now applying, you need a good explanation for the delay. Acting within days of discovery is significantly stronger.
Q: What if the restraint clause is too broad?
A: A court will not grant an interlocutory injunction to enforce a restraint that is plainly unenforceable at first sight. Unlike New South Wales, Queensland courts cannot read down an overly broad clause. If your restraint is too wide, the injunction application will likely fail, and you will be liable on your undertaking as to damages for any harm caused to the defendant while proceedings were on foot.
Q: Can I apply without telling the other side?
A: Yes, in urgent cases. An ex parte application is one made without notice to the other party. It is appropriate where giving notice would allow the defendant to take steps that would defeat the purpose of the injunction. Courts require strict compliance with the duty of full and frank disclosure on ex parte applications, including disclosure of arguments the other side would run.
Q: What happens at the return date?
A: The return date is the hearing shortly after an ex parte order at which both parties are heard. The defendant can argue the injunction should be varied or discharged. The applicant must maintain the basis for the order. The court may then extend, modify, or discharge the interlocutory injunction pending the final hearing.
Q: Does the undertaking as to damages create real financial risk for me?
A: Yes, if the injunction is ultimately found to have been wrongly granted. The undertaking is a commitment to compensate the defendant for all loss they suffer while subject to the order. In employment restraint cases, this can include income lost while prevented from working. The stronger your underlying case, the lower this risk is in practice.
