Hanna v OAMPS: post-employment restraints valid

Employers are increasingly seeking to enforce post-employment restraints. But are they valid?

In Hanna v OAMPS Insurance Brokers Ltd (ACN 005 543 920) [2010] NSWCA 267 the NSW Court of Appeal dismissed an appeal from the trial judge’s decision to enforce a post-employment restraint covenant for 12 months throughout Australia.

On 30 September 2008, Mr Hanna signed a written employment contract, a schedule to which contained a post-employment restraint deed. The deed contained a cascading or step clause with 9 restraints, the widest period and area being 15 months in Australia, and the narrowest being 12 months in, in Mr Hanna’s case, the metropolitan area of Sydney.

Mr Hanna was an experienced insurance broker who commenced employment with OAMPS in 1990 and resigned on 22 April 2010, having accepted an offer to work at another insurance broking firm.

The Court of Appeal decided that:

  • the clause not void for uncertainty
  • The restraint deed was not against public policy
  • The restraint covenant was not unreasonable
  • the 12 months restraint period was reasonable.
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