Urgent Restraint Litigation & Risk Mitigation for an Employer

1. Overview

Acted for an employer whose employees were poached by a rival business. Instructed to seek urgent interlocutory relief to prevent the former employees from working for the rival competitor in breach of their employment obligations.

2. The Challenge

Enforcing urgent interlocutory restraints of trade in New South Wales involves an exceptionally stringent legal test balancing the balance of convenience, the adequacy of damages, and the enforceability of covenants under the Restraints of Trade Act 1976 (NSW). When an interlocutory application is unsuccessful, the employer faces acute exposure to substantial adverse costs orders and aggressive leverage from the competing business.

3. Legal Strategy & Execution

• Urgent Interlocutory Proceedings: Commenced expedited proceedings in the Supreme Court of New South Wales and appeared before Justice Young seeking an urgent interlocutory injunction restraining the former employees from commencing with the rival business.
• Strategic Litigation Pivot: Following an unsuccessful outcome at the interlocutory stage, immediately repositioned the client’s legal posture to curtail escalating litigation costs and neutralize the rival’s adverse costs claims.
• Commercial Settlement Negotiation: Leveraged general proceedings negotiations to settle the dispute globally, achieving a comprehensive resolution without requiring our client to pay the rival business’s legal costs.

4. Commercial Outcome

Mitigated acute commercial and cost exposure for the client by bringing contested Supreme Court proceedings to a final settlement on mutually acceptable terms, completely shielding the employer from adverse party-party costs orders.

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