Breaches of Restraint of Trade Clauses

We advise business owners as well as employees on restraint of trade issues and non-compete clauses in employment contracts.

Business owners should always be prepared for the risk of employees leaving and starting up a rival business, or joining a competitor, and trying to take your hard-won customers with them.

The best protection for an employer is to include restraint of trade clauses in their employment contracts.

Business owners should regularly review their restraint clauses.  This is particularly relevant where there has been a change in the nature of business because the critical date for assessing the reasonableness of the restraint clause is the date that the contract was made.

Courts do not like to impose a restraint upon an employee's ability to earn a living or to restrict competition.  Nevertheless, courts will often uphold restraint clauses and find in favour of employers.

The ability to restrain former employees is contingent upon the efficacy of the restraint of trade clause.  The law allows the use of restraint clauses where it can be proven that there were 'special circumstances' which made it necessary to protect the interest of the parties.  In assessing what type of protection will be regarded as reasonable, an employer must identify the relevant risk such as the risk of the loss of business to a competitor by the use of a personal connection with clients and information about those clients.

Aherns Lawyers handles all claims relating to:

  • breaches of contracts of employment;
  • deeds of confidentiality;
  • breaches of restraint of trade clauses;
  • theft of confidential information;
  • theft of trade secrets;
  • improper use of company materials;
  • theft of employers' clients;
  • theft of trade secrets;
  • improper use of company property;
  • unfair dismissal claims for employers;
  • legal advice on non-compete clauses; and
  • defending Worksafe prosecutions.

We also act for employers in unfair dismissal cases.

We prepare senior employee contracts and management contracts, deeds of confidentiality and secrecy, restraint of trade clauses as well as providing the full suite of services in relation to enforcement of all these agreements.

For more information on pursuing employees who steal company secrets, property and client lists, please see our newsletter here.  Because our offices are not located in the CBD our rates are substantially lower, often up to 20% lower, than most commercial law firms.

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