ACP Restraint and Confidentiality Precedents
Currency:
Current to 2012
Updating forecast: 2 updates annually or as developments required
Author:
Dr Robert Dean
Robert Dean is a barrister specialising in commercial and intellectual property
law at the Victorian Bar.
He has degrees in science and law from Monash University, a master of laws
from Melbourne University, an MA in economics from Cambridge University.
He was also awarded a Doctorate of law from Melbourne University as an LLD
for his work “The Law of Trade Secrets”, which was later published as the
seminal work in this area: The Law of Trade Secrets and Personal Secrets.
MODULE OVERVIEW
Table of Contents
1. Pre-negotiation disclosure
Introduction &
Agreement (detailed drafting notes)
See table of clauses below
2. Confidentiality
Introduction &
Agreement (detailed drafting notes)
See table of clauses below
3. Post-employment restraint of trade
Agreement (detailed drafting notes)
See table of clauses below
4. Breach of confidentiality

Search Orders & Practice Notes
(Federal Court and
Templated Court Forms &
Practice Notes
State Supreme Courts)


Ex-parte Interlocutory Injunction
Breach of Confidence
Introduction &
Statement of Claim
Sample Form
Breach of Fiduciary Duty
Introduction &
Statement of Claim
Sample Form
Discovery Orders
Breach of Fiduciary Duty
Introduction &
Statement of Claim
Sample Form
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MODULE DETAIL
A. Tables of clauses for key agreements
1. Pre-negotiation disclosure agreement
1.
2.
3.
4.
5.
6.
7.
8.
9.
Information
Disclosure
Description of information
Secret information
Future amendments
Non-disclosure
Third party disclosure
Consent
Arbitration
Schedule 1
Schedule 2
2. Confidentiality agreement
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Secret information
Future amendments
Consent
Restricted access
Management and return of confidential information
Confidentiality
Post-employment consent
Intellectual property
Termination
Arbitration
Schedule 1
3. Post-employment restraint agreement
1.
2.
3.
4.
5.
6.
7.
8.
9.
Preliminary
Termination
The restraint
Business activity
Soliciting customers
Soliciting employees
The restricted period
The restricted area
Garden leave
2
B. Sample clause content
From Pre-negotiation disclosure agreement:
8
Consent
(a)
The Discloser, at the request of the Recipient, will immediately give the consent
referred to in clause 9 where:
(b)
(i)
the Recipient obtains possession of the Secret Information from sources other
than this agreement; and
(ii)
the possession does not arise from a breach of confidence of another to the
Discloser with respect to the Secret Information.1
The Discloser may withhold consent for the minimum period that would ensure no
unfair advantage or springboard was obtained by:
(i)
the Recipient; or
(ii)
others associated with the Recipient or who derived advantage through the
Recipient
as a consequence of the disclosure of the Secret Information.2
From Confidentiality agreement:
9
Termination3
On the termination of the employment, the Employee will render up to the Employer all
papers, documents, notes, books, computer software and firmware, mobile phones (and sim
cards) in the Employee’s possession, power or control that contain all or part of the Secret
Information, together with all company property in the employee’s possession, power or
control.
1
A simpler but less effective clause would be one that does not require the Recipient to seek permission from the
Discloser should the secret information independently enter the public domain. This will simply limit the agreement
to the situation where the secret information remains secret. Much depends on the level of trust that exists
between the parties as it may be that the Discloser will require notification of the Recipient’s intention to start using
the information despite no agreement so that it can inquire for itself if the secret information is no longer secret.
2
Clearly this agreement gives the Discloser no protection against persons not a party to the agreement and
consequently this clause is relevant only to the extent that the Recipient is obtaining an advantage through the
springboard even though the actual manufacturing is done by a third party. But it is possible through Equity to
enjoin third parties gaining any advantage from the misuse of the Discloser’s secret information.
[Further information on Springboards and associated case law is provided in ACP Restraint and Confidentiality
Precedents.]
3
It is essential that the employer take, and be seen by the courts to take all measures possible to protect its
confidential information. A list of measures is set out in the notes to this precedent.
Clause 9 protects the ex-employer from the ex-employee removing trade secrets say in the form of client details in
their diaries or mobile phones.
Blackmagic Design Pty Ltd v Overliese [2010] FCA 13 highlights the need for employment agreements to specify
the employee's obligations to return intellectual property to the employer upon termination. Jessup J found that an
ex-employee did not breach copyright when he copied his employer's confidential information from his personal
computer to a DVD and USB in order to return the property to the employer. His Honour found there was an
implied licence in his contract of employment to copy material for the purposes of returning or destroying it (an
Implied Return or Destroy Term).
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From Post-employment restraint agreement:
Soliciting employees4
6
Following the termination of the employment agreement the employee will not for the
restriction period solicit or seek to solicit away from the employer:
(a)
employees, sub-contractors or agents with whom he had contact in the course of
carrying out the employee’s duties and which because of that contact obtained
knowledge of their special skills and experience in the performance of their duties for
the employer;
(b)
the following employees:
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(i)
;
(ii)
.
The old rule that an employer was entitled to protect his stable of employees no longer holds true. Today the only
basis upon which an employer can be confident of obtaining protection is where there are employees with special
jobs and skills and knowing of those placements and skills can be seen as confidential information obtained as a
result of the ex employees work (see historical analysis in Cactus Imaging v Peters (2006) 71 NSWLR 9; [2006]
NSWSC 717 [56], [57]; Aussie Home Loans v X Inc Services [2005] NSWSC 285 (7 April 2005).
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