In Entello Pty Ltd v Firooztash [2016] QDC 050, the Queensland District Court granted an injunction against a financial advisor who had breached a restraint of trade clause by soliciting his employer’s former clients. The decision is a good reminder for all employers about the importance of including restraint of trade clauses in employment contracts and deeds of release.
What is solicitation?
Farr DCJ noted that ‘solicitation’ involves a former employee:
- Conveying a message to a client of his or her former employer that he or she would be willing to deal or do business with the client; and
- Encouraging the client to deal or do business with him or her.
When will non-solicitation clauses be enforceable?
Non-solicitation clauses will only be enforceable if the employer proves that the clause is reasonable and is not contrary to the public interest. If a non-solicitation clause is enforceable, the employer may be able to obtain an injunction against the former employee. Such an injunction may be obtained urgently, and will compel the employee to comply with the clause.
Farr DCJ said that non-solicitation clauses with the following features are likely to be valid and enforceable:
- The employee was in a position in which he or she could gain the ‘trust and confidence’ of the employer’s clients.
- The relationship between the employee and the client was such that there is a risk that the client may follow the employee to his or her new employer or business.
In New South Wales, restraint clauses are governed by the Restraints of Trade Act 1976 (NSW). This Act gives courts the power to modify a contested restraint clause to make it reasonable and enforceable if deemed necessary.
However, no other Australian states and territories have an equivalent legislation. This means that if the courts determine the clause unreasonable, it can be deemed entirely invalid and crossed out, unless this is a cascading clause. Courts in these jurisdictions generally do not have the power to rewrite the clause to be reasonable.
Lessons for employers
Entello’s success in enforcing a non-solicitation clause against a former employee is a good reminder of the value of including non-solicitation clauses in employment contracts and deeds of release.
However, as Farr DCJ’s decision makes clear, non-solicitation clauses may not be enforceable against all employees. Employers should consider which particular employees are likely to develop relationships of ‘trust and confidence’ with clients and use non-solicitation clauses to restrain the conduct of these employees should they choose to leave the business.
How can JFM Law help?
If you have any queries regarding the drafting of non-solicitation clauses, determining the suitability of a clause for your employee, or if you are seeking advice as to enforcement options, contact JFM Law on (02) 9199 8597 for a no obligation chat. If you would rather get in contact through email, send your question through or by email.
The information contained in this post is current at the date of editing – 2 October 2025.
