Can an Employee Take Client Information When They Leave? Premprop v Davies

Last Updated on 10/09/2026 by Damin Murdock and Malak Amgad

When an employee resigns and joins a competitor, employee confidential information can quickly become a major concern, particularly where the employee had access to client databases, CRM records and commercially sensitive information. Employers may assume that a restraint of trade clause will prevent a former employee from contacting clients, but the reality can be more complicated. The NSW Supreme Court’s decision in Premprop Sales Neutral Bay Pty Ltd t/as Belle Property Neutral Bay v Davies [2025] NSWSC 725 demonstrates why protecting employee confidential information can become just as important as enforcing post-employment restraints when an employee moves to a competing business.

What happened?

Belle Property Neutral Bay employed Mr Davies as a sales agent. During his employment, he had access to the agency’s CRM system, which contained client contact details and other business information.

When Mr Davies resigned and joined another real estate agency, Belle Property alleged that he had downloaded information from its CRM system shortly before leaving. The company argued that this was in breach of his employment contract, which contained restraint of trade and confidentiality provisions.

Concerned that confidential information could be used by a competing agency, Belle Property sought urgent orders from the Supreme Court to protect its business while the dispute was resolved.

The issue wasn’t just that the employee started working for a competitor after his resignation, but it was also concerning confidential information and customer relationships requiring immediate protection. The employer argued that once confidential information is copied or used, it becomes difficult to undo the damage, even if the employer ends up succeeding at trial

This is one reason why courts frequently pay close attention to allegations involving client databases, pricing information and confidential business records.

The Court’s response

The Court accepted there was a serious question to be tried regarding the contractual restraints and the alleged misuse of confidential information.

However, the Court held that the balance of convenience did not justify continuing the broad restraints sought by the employer. It declined to prevent the former employee from dealing with clients or carrying on his employment with the competing agency pending trial.

Instead, the Court made much narrower orders preserving the downloaded confidential information and accepted undertakings requiring its return or protection.

What can employers learn from this case?

• Your client database may be more valuable than your restraint clause

Employers often focus heavily on drafting lengthy restraint provisions while paying much less attention to how confidential information is stored and protected.

If customer information can be freely downloaded without adequate controls, litigation may become far more complicated.

• Every restraint should match the employee

Courts continue to assess whether restrictions are reasonable having regard to the employee’s position, responsibilities and access to confidential information.

A clause appropriate for a director or senior executive may not be enforceable against a junior employee.

If you are currently entering into a complex commercial agreement, or are involved in litigation regarding contract performance,  feel free to contact Damin Murdock at Leo Lawyers via our website, on (02) 8201 0051 or at office@leolawyers.com.au. Further, if you liked this article, please subscribe to our newsletter via our Website, and subscribe to our YouTube, LinkedIn, Facebook and Instagram. If you liked this article or video, please also give us a favourable Google Review.

DISCLAIMER: This is not legal advice and is general information only. You should not rely upon the information contained in this article, and if you require specific legal advice, please contact us.