Disputes between employers and employees can cause a great deal of stress and disruption for everyone involved. Resolving the dispute quickly and with discretion is in the best interests of both the employee and the employer.
Employment contracts sometimes contain clauses to restrain what the employee is allowed to do at the end of their period of employment. This is known as a restraint of trade clause. Restraint of trade clauses are usually intended to stop the employee from taking trade secrets, and customer contacts and connections out of the business when they eventually cease employment with that employer.
In many cases, restraint of trade clauses have been found by the court to be unenforceable on the grounds that such clauses are against public policy. That is certainly not always the case. Carefully considered and well-written restraint of trade clauses are increasingly being upheld by the Court. The more reasonable a restraint of trade clause is, the more likely the Court will be to uphold the clause
A restraint clause is unlikely to be upheld if the court considers that the protection it provides to the employer is too broad or overreaching. Each situation is different, and a restraint of trade clause used effectively in one case, may not successfully translate to a different set of circumstances.
Employees who are asked to enter into an employment contract that contains a restraint of trade clause should be aware of the potential impacts this may have on them in the future. A restraint of trade clause can limit your ability to start your own business in the future or restrict your future employment options. On the other side, if you are an employer and some of your employees are given access to confidential information that would, if passed on to a competitor, be detrimental to your business, you may wish to negotiate restraint of trade clauses into some of your employment contracts.
Discussing your case with an experienced employment lawyer can help you to understand where you stand and what your rights are. Lawyers are often able to convince the other party to negotiate a settlement so that the matter is resolved relatively quickly. Where agreement can’t be reached and goes on to the Fair Work Commission (or another independent body) for determination, a skilled employment lawyer can work with you through the process to help you get the best outcome in all the circumstances.
We have a proven track record of getting results for our clients, having provided advice and representation to employers and employees on a wide range of complex employment issues. We have the knowledge and experience you need to get the best possible outcome, and we can help you in all areas of employment law, including:
We are here to help. Simply contact us on 1300 907 335 or complete the enquiry form on this page.
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