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JWS represented Seven Network (Operations) Pty Limited (Seven) and its executive programmer John Stephens in successfully defending the Supreme Court proceedings brought against them by Network Ten Pty Limited (Ten). JWS also recently achieved a successful outcome for Yahoo!7 Pty Ltd (Yahoo!7) in the proceedings brought against their new CEO by Fairfax Media Management Pty Ltd (Fairfax). These cases highlight important issues relevant to the departure and recruitment of senior executives. The judgement handed down on 29 May 2014 in Network Ten Pty Limited v Seven Network (Operations) Pty Limited & Anor  NSWSC 692 provides important guidance for employers regarding the recruitment of employees and the making of counter-offers to employees who have accepted employment elsewhere.
Mr Stephens was employed by Seven and signed a contract of employment with Ten on 6 March 2014 (Ten Contract). The contract was for a fixed term of two years commencing on 9 June 2014, after the expiry of his notice period with Seven. On 7 March 2014, Mr Stephens resigned from Seven by providing 3 months' notice and was required to work out the notice period. On 10 March 2014, Mr Stephens accepted a counter-offer by Seven. Mr Stephens then notified Ten that he withdrew his acceptance of the Ten Contract.
Ten commenced proceedings against Mr Stephens for breach of the Ten Contract and against Seven for inducing the breach of contract. Ten sought to restrain Mr Stephens from working at Ten's competitors and to restrain Seven from assisting, inducing or otherwise procuring Mr Stephens to not comply with his obligations under the Ten Contract.
On 17 March 2014, Justice Brereton declined to grant Ten's application for interlocutory injunctive relief on the basis that granting the injunction would effectively "sterilise" Mr Stephens from working for anyone but Ten for two years against his will or force him to remain "idle" for that period.
In the final decision, Justice Stevenson held that Ten was only entitled to a declaration that the Ten Contract remained of foot and as it was not otherwise entitled to any of the relief sought, Ten's claim was dismissed. Importantly, His Honour held that:
Fairfax Media Management Pty Limited v Harrison  NSWSC 470 is an important case considering post-employment restraint obligations.
Mr Harrison was the Group Sales Director at Fairfax who, after resigning from Fairfax in December last year, commenced employment with Yahoo!7 as CEO on 9 April 2014. Mr Harrison was subject to a 6 month restraint period under his contract with Fairfax which was to expire on 11 June 2014.
Mr Harrison's contract with Fairfax contained a 12 month non-solicitation and a 6 month non-compete restraint. The non-compete restraint purported to prevent Mr Harrison from being involved in a business competitive with his "Business Unit" at Fairfax and commenced to run after notice of termination of the employment was given.
Although Mr Harrison commenced working for Yahoo!7 before the 6 month non-compete expired, Mr Harrison provided undertakings to the court regarding compliance with the non-solicitation restraint and the confidentiality obligations.
Justice Ball was satisfied that Fairfax had a strongly arguable case that the restraint of 6 months was reasonable.
However, Ball J exercised his discretion to refuse the relief sought by Fairfax based on the following three factors:
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