Young Adelaide mum defeated employer’s unreasonable restraint claim

WK Lawyers recently represented a young hairdresser mum who worked as a casual employee in South Australia. She was made to defend herself when her employer, Changing Looks, brought a claim against her for allegedly breaching a restraint of trade clause in her employment contract, after her employment ended.

The restraint attempted to operate for 2 years after her 14 weeks of casual employment ended.

Changing Looks initially threatened to recover over $200,000.00 against the casual employee for allegedly attempting to divert some of Changing Looks clients to her newly formed hairdressing business when she posted on her personal Facebook page about her new venture.

The claim by the employer was quickly reduced to $90,000.00 after the casual employee sought legal advice.

A Trial over 3 days culminated in a finding that the restraint clause was void in its entirety – so unenforceable.

The Decision also found there was no evidence establishing solicitation or diversion, and found the Applicant, Changing Looks, failed to provide any coherent loss in any event.

Importantly, and indeed we say as a sign of the times noting the discussions being had about restraints at a Federal level, the Magistrate considered the worker being a lower paid worker and could be terminated with 1 days’ notice (as a casual employee) as a further reason to find a 2-year restraint was excessive in ‘’extent and duration’.

Conclusion:

Lower paid workers and casual employees should not be restrained.

Too often is the case, as it would have been in this case, that workers feel bullied into paying their employer when a claim is brought against them.

The threat of bankruptcy is often too much, as is the cost of litigation. Workers, and especially lower paid workers, should not be put in such a position. There must be Federal legislation that prohibits such restrictive restraints.

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Andrew Wright

May2024