A recent Federal Court decision provides a timely reminder to employers of the role post-employment restraints can play in protecting legitimate business interests, particularly where a senior employee leaves with detailed knowledge of confidential information, business strategy and key customer relationships.

In Telstra Group Limited v Ieraci [2026] FCA 1661, Justice Snaden granted an interlocutory injunction restraining a former senior Telstra Group Limited executive from working for competitor Vocus Group Limited until the expiry of his six-month contractual restraint on 1 January 2027.

Importantly, the Court did not need to be satisfied that the former employee had actually misused Telstra’s confidential information. The risk associated with what a senior executive already knows, and the practical difficulty of separating that knowledge from decisions made for a competitor, featured prominently in the Court’s reasoning.

What happened?

Mr Ieraci had worked with Telstra Group Limited since 2007 and, immediately before his redundancy in July 2026, held the position of Executive Director, Strategic Portfolio Management. His responsibilities included the strategic direction and performance of a significant part of Telstra’s enterprise business. His position gave him detailed knowledge of Telstra’s operations, financial performance, products, pricing, commercial plans, strategic projects, customers and vendors.

His 2024 employment contract contained confidentiality obligations and post-employment restraints. Relevantly, the restraint prevented him, for six months after leaving Telstra, from providing a competing business with services that were the same as or similar to those he had provided to Telstra during the final 12 months of his employment.

He subsequently commenced employment with Vocus Group Limited as Managing Director, Business and Digital Infrastructure, with responsibility for its business-to-business go-to-market function, including product, marketing and sales. Telstra sought an injunction preventing him from continuing in that employment until the restraint expired.

The general principles: when can an employer enforce a restraint?

A restraint is not enforceable simply because it appears in an employment agreement.

The starting point is that a contractual restraint against competition is presumed void as contrary to public policy. That presumption can, however, be overcome where the restraint is reasonable between the parties and not unreasonable in the public interest.

Critically, an employer must be seeking to protect a legitimate business interest. An employer is not entitled to restrain a former employee merely to prevent competition.

Legitimate interests capable of protection can include confidential information and trade secrets, as well as an employer’s customer connections and relationships. The restraint must also go no further than is reasonably necessary to protect those interests.

That distinction is particularly important for employers. The question is not simply whether an employee has agreed not to compete. It is what legitimate business interest the restraint is protecting and whether the restraint is reasonably necessary to protect it.

Why did the Court grant the injunction?

Because Telstra was seeking interlocutory relief, the Court considered whether it had established a prima facie case for final relief and whether the balance of convenience favoured the grant of an injunction. Those considerations are interrelated. Several matters ultimately favoured Telstra.

1. Telstra had legitimate business interests requiring protection

The Court considered that Telstra had a strong prima facie case that the restraint was directed towards protecting legitimate commercial interests.

Two were particularly significant: confidential information and commercial relationships.

Mr Ieraci’s senior position meant he possessed extensive knowledge concerning Telstra’s business strategy, financial performance, products, pricing, commercial plans, strategic projects, customers and vendors. He also had relationships with strategically important customers, employees and suppliers.

These were not simply interests in avoiding competition. They were identifiable commercial interests that Telstra was legitimately entitled to seek to protect.

2. There was significant similarity between the two roles

The nature of the employee’s new position was also important.

The Court considered there was a strong prima facie basis for concluding that Vocus Group Limited was a competing or “Restricted Business” and that the employee’s new position involved services materially similar to those he had provided to Telstra.

In practical terms, the concern was therefore not simply that a former employee had joined a competitor. It was that a senior executive with significant confidential knowledge and commercial relationships was moving into a materially similar senior role with that competitor.

3. The six-month period was relevant

The scope and duration of a restraint are relevant to whether it goes further than reasonably necessary to protect the employer’s legitimate interests.

Here, the restraint was for six months. The Court concluded there was a strong prima facie case that, particularly given its relatively modest duration, the restraint did not extend beyond what was reasonably necessary to protect Telstra’s interests.

4. Promising not to use confidential information was not enough

Perhaps the most useful aspect of the decision for employers is the Court’s consideration of undertakings offered by the former employee.

Mr Ieraci had offered extensive undertakings limiting what he would do at Vocus and protecting against the misuse of confidential information. Nevertheless, the Court was not satisfied those undertakings adequately addressed the risk.

Justice Snaden observed that John Ieraci possessed confidential information and valuable customer relationships that he simply could not “unpossess”. Given his knowledge and seniority, the Court considered it unrealistic to expect that he could entirely isolate that information from high-level and fast-moving decision-making for Vocus.

Crucially, there did not need to be an intention to misuse confidential information.

Even innocent or inadvertent use could cause significant prejudice to Telstra, and the resulting harm could be extremely difficult to identify, quantify or adequately remedy through damages after the event.

5. The balance of convenience favoured Telstra

The Court then had to weigh the potential prejudice to Telstra if the injunction were refused against the prejudice to Mr Ieraci and Vocus if it were granted.

For Telstra, there was a risk that valuable confidential knowledge could be used, even inadvertently, in the interests of a direct competitor. Importantly, that type of commercial harm could be extremely difficult to quantify afterwards.

On the other hand, the potential prejudice to John Ieraci was significantly reduced because Telstra undertook to pay him during the balance of the restraint period, and there was no evidence that granting the injunction would result in him losing his Vocus position. Telstra also provided the usual undertaking as to damages.

In those circumstances, the balance favoured preserving the restraint until its expiry.

For employers, having the right protections in place matters

The decision is an important reminder to employers that employment agreements can play a critical role in protecting legitimate business interests after an employee leaves.

But the focus should be on the interest requiring protection.

Depending on the employee and the business, that may include:

• confidential commercial information;
• strategic or financial information;
• pricing and product information;
• customer connections and goodwill;
• supplier relationships; or
• other commercially sensitive information obtained through the employee’s position.

This is particularly important as employees become more senior.

An employee who begins in one position may, over time, gain access to significantly more confidential information, become involved in strategic decision-making or develop valuable relationships with key customers and suppliers.

Employers should therefore consider whether their employment agreements continue to reflect the employee’s actual position and the legitimate business interests requiring protection, particularly following promotions or substantial changes in responsibilities.

If an injunction is needed, evidence and timing matter

There is also an important litigation lesson from the case.

Having a restraint in an employment agreement does not itself guarantee that a Court will urgently enforce it.

An employer seeking an interlocutory injunction must be able to demonstrate a sufficient prima facie case and persuade the Court that the balance of convenience favours intervention before the dispute proceeds to a final hearing.

That makes the evidence important.

An employer considering urgent relief should be able to identify matters such as:

• what legitimate interest requires protection;
• what confidential information the employee possesses;
• the nature of relevant customer or commercial relationships;
• the employee’s former responsibilities;
• what they will be doing for the competitor; and
• what commercial prejudice may arise if the Court does not intervene.

Timing can also matter. The Court recognised that delay is relevant to the discretionary decision whether to grant interlocutory relief. Although the delay in this case did not alter the outcome given the strength of Telstra’s prima facie case and the balance of convenience, the Court observed that it might have assumed greater significance had those considerations been different.

For an employer considering enforcement of a restraint, particularly one operating for only a limited period, obtaining advice and considering the available evidence early can be critical.

The takeaway

Telstra Group Limited v Ieraci [2026] FCA 1661 shows that a restraint clause can have real force where it is directed towards protecting legitimate business interests.

The decision does not mean that an employer can prevent a former employee from working for a competitor simply because it would prefer them not to. The Court’s focus is on whether there is a legitimate interest requiring protection, whether the restraint is reasonably necessary to protect it and, where urgent relief is sought, whether the circumstances justify intervention before final trial.

For employers, the practical message is simple:

Understand what legitimate business interests need protection before an employee leaves. If those interests are threatened, act early and be prepared to demonstrate to the Court why protection is required.

This article provides general information only and does not constitute legal advice. The enforceability of post-employment restraints and the availability of injunctive relief depend on the contractual terms, circumstances and evidence of each case.

If you are concerned that a current or former employee may be putting your confidential information, customer relationships or other legitimate business interests at risk, contact Tracer Law or Sakshi Bhati, Senior Associate, on (07) 3184 3517 or at [email protected] to discuss your options, including urgent injunctive relief where appropriate.