The timing, the rival hire, and the gap that stalled an employer's claim
Victoria's Supreme Court struck out a software firm's claim that a rival gained from its ex-manager's alleged misuse of confidential files - for now.
In a decision dated August 24, 2026, the court delivered a mixed result in a dispute Cyara Solutions brought against a former sales manager and a competitor, Hypertech Solutions. For HR leaders, it is a plain lesson in the distance between a strong suspicion and a claim that holds up.
Cyara alleges its former Australia and New Zealand sales manager misused confidential information and broke confidentiality and restraint obligations after leaving, and that Hypertech knowingly benefited. None of that has been tested. The court ruled only on whether Cyara had set out its claim against the competitor properly - and found it had not.
The backdrop is the kind of exit that makes HR uneasy. Cyara alleges the manager downloaded about 11,000 files to a personal drive over two days in December 2023, saved eight more on Christmas Day, and moved documents onto a flash drive the next day, according to the judgment. Cyara ended his employment in January 2024. The following day, both sides signed a settlement deed in which he agreed to keep to his confidentiality, intellectual property and restraint obligations. Weeks later, he began doing sales consultancy work for Hypertech - a company chasing the same government testing work he had handled at Cyara.
Cyara's case against Hypertech was that the rival was an “accessory” - that it knowingly helped or benefited from the alleged misuse. To get that off the ground, Cyara had to spell out the essentials. The court found it hadn't. It held that Cyara never pinned down which confidential information was actually misused, how it was misused, how Hypertech supposedly knew, or how the rival had allegedly acted dishonestly.
Reduced to its core, the court said, Cyara's case looked like little more than a worker leaving one employer and competing against it - not enough, on its own, to support a serious claim against the new employer.
Two points sealed it. First, the file downloads: Cyara did not allege Hypertech knew anything about them, so its most striking fact could not show what the rival knew. Second, timing: the court found the rival's supply deal with its telecommunications customer, Optus, was finalized the day before the manager started - and Hypertech had signed it months earlier, while he was still at Cyara. The rival's work did not, as Cyara suggested, land only once he arrived.
The result cut both ways. The court refused to throw Cyara's case out early or halt it permanently, and it rejected the rival's claim that it had been treated unfairly at an earlier hearing. But it agreed the claim against Hypertech was not set out properly, struck it out, and gave Cyara the chance to redraft it. Cyara's separate claims against the former manager were not part of this ruling and continue.
For HR, the takeaway is practical. Confidentiality clauses, IP terms, restraint provisions and a settlement deed at exit are all worth having - but they don't carry a dispute by themselves. Going after a departing employee and their new employer takes specifics: which information, used how, and known by whom. A large data download and a rival hire, on their own, may not get an employer across the line.
The allegations against both the former manager and Hypertech remain untested, and the proceeding continues.
