Members Area
    
 
   

CIVIL LAW

Contracts - Restraint of Trade Clauses

 Select Topic
 
 Related Topics
Feedback/Reviews/Blogs


If you are an employee,  what steps can an employer take to prevent you from working at a similar job elsewhere in the future?

If you are an employer, what steps can you take to prevent an employee leaving your employment to work in competition elsewhere?

A restraint of trade clause must be clearly distinguished from the claim which may be made by an employer against a former employee taking trade secrets or breaching the intellectual property rights of the employer.

There does not have to be a restraint of trade clause in the contract of employment to allow the employer to take action against an ex employee in those circumstances.

Restraint of trade clauses are becoming increasingly common in employment contracts.

A typical clause will prohibit a former employee from working in a specific area of employment in a specific geographical area for a limited period of time. These clauses are enforced by suing the ex-employee seeking an order from the Court preventing the employee from carrying out that work.

TWO EXAMPLES

If a person was employed as a basic labourer in a factory job and left to work as a labourer in another factory, then a Court would simply not enforce any restraint of trade clause against employee in those simple circumstances.

On the other hand, if an employer was building up a particular business in an area, establishing clientele and using the employee to establish or develop those clients, then a reasonable restraint of trade clause for a reasonable period of time would very likely be enforced.

The purpose of a restraint of trade clause is to prevent the employee from later using the employer’s trade secrets or confidential information to aid one of the employer’s competitors.

Post employment obligations, particularly restraint of trade clauses, are appearing more and more frequently in graduate employment contracts. What are restraint of trade clauses?

A restraint of trade clause is a prohibition or a limitation on the freedom of a professional to change jobs. A restraint clause may seek to limit the geographic area you can work in, or to restrict you from working for a specific company.

A broad restraint clause might provide that :

.....The first part of this topic has been displayed free of charge. Join up for $45 to have access to this and all other topics!


Feedback/Reviews/Blogs
Feedback/Blogs/Reviews from related topic: Civil Law and Claims
"I liked you Civil Index. Not much need for family or criminal but you civil index is very good to have at my fingertips. Thanks for providing this service T. (name withheld)"
"Great assistance. I agree with the above. Your civil topics are great. Better than we get at Polytech where I am studying Business Law. Terry -Dunedin - June 2007"
Feedback/Blogs/Reviews from related topic: Civil Law and Claims
"I found all this Company Law stuff really helpful. Not too academic but enough to get a really good grounding in some of the pitfalls. You need to read all the company topics to get a handle on this huge area. Anthony - Christchurch - April 2007"
Feedback/Blogs/Reviews from related topic: Civil Law and Claims
"I found all these contract topics interesting and helpful. JD. Napier December 2006"
Feedback/Blogs/Reviews from related topic: Civil Law and Claims
"I found this interesting. I want to sue for punitive damages and I was interested to learn that our courts are pretty conservative. I think the Welfare have quite wrongly taken my kids and I have found out that the affidavit they gave to a Judge to get an order to uplift them was known to the Welfare to be incorrect. They told the Judge that I had drug convictions but when I found out 5 months ago that they thought that I proved then to them that this was untrue yet I have now found that they have still put this false evidence in an affidavit. But they have also told other people about my "drug convictions". You have to watch these people. (name witheld) - May 2007"
Feedback/Blogs/Reviews from related topic: Civil Law and Claims
"The fact examples or samples really helped me. Your topic also gave me confidence to speak up for myself. My case was a simple car accident but the other driver wouldn't pay and my lawyer was going to charge me $700 just to help. Netlaw allowed me successfully to "go it alone". Thanks. Thanks. I am on to making my own will now. Miriam (and hubbie)"
Feedback/Blogs/Reviews from related topic: Civil Law and Claims
"Very, very helpful topics on Employment law, procedure, contracts and tips. Well worth the cost.

Company name withheld by request."

Feedback/Blogs/Reviews from related topic: Civil Law and Claims
"You provide all the documents. Thank you. - Brett -Auckland"
Feedback/Blogs/Reviews from related topic: Civil Law and Claims
"Richwhite and Fay should have signed up for Netlaw. It would have been money better spent. Great work, Netlaw. - Brett H - North Shore"
 Select Topic
 
 Related Topics