Question: Northern Cross Computer Systems Pty Ltd (NCCS), an IT services and consulting firm in Melbourne, employs Beatrice as an IT specialist. NCCSs main business is
Northern Cross Computer Systems Pty Ltd (NCCS), an IT services and consulting firm in Melbourne, employs Beatrice as an IT specialist. NCCSs main business is in Victoria. Beatrice held a 40% shareholding in NCCS that she had gradually accumulated over the course of her employment (18 years). In June 2016, Beatrice entered into a share sale agreement with NCCS to sell her shares to Indigo Pty Ltd. The agreement provided for payment of $3.5 million to Beatrice and for her to continue as an employee of NCCS with a non-compete restraint in favour of NCCS for a period of eight years (the Restraint Period). The contract stated that during the Restraint Period, she must not carry on, engage in or have any involvement in the Restricted Business. Restricted Business was defined as any business which is competitive with, or likely to be competitive with, the Business at the relevant time during the Restraint Period. Business was defined as the business of IT procurement and associated IT managed services carried on by the Company. Beatrice is keen to move away from Melbourne to avoid her half-brother, so she gives NCCS one months notice (provided in the employment contract), and informs NCCS that she intends to sign a lucrative contract with Green Connections Pty Ltd (GCPL), an IT company in Darwin. NCCSs CEO, Jeff, approaches you about Beatrices conduct, and says that he recently read a Victorian case from 2017 about this type of thing, and thinks Beatrice is in breach of her agreement with NCCS in June 2016. Advise Jeff if NCCS can enforce that agreement and prevent Beatrice from joining GCPL. Use case law to support your answer.
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