All restrictions on employees can be included within restraint of trade clauses of their employment agreements. The Restraint of Trade Act 1976 (NSW) states that restraints of trade are valid to the extent that they are not against public policy (section 4). However, if the restraints are required in order to provide protection of the parties concerned which is reasonably necessary, then, despite being against public policy, the restraints are valid.
Behaviours of ex-employees that can be restrained include:
- the use of confidential information obtained during employment
- the unauthorised use of the employer's property following termination of employment
- the solicitation of clients, suppliers and other employees from their former employer
- the right to compete with their former employer.
There is also a balance of convenience consideration- restraints may be beaten by employees if extreme circumstances are present whilst a clause restraining competition with their former employer exists, including if the employee will suffer great hardship if they do not work in the industry.
Remedies for a breach of restraint of trade clauses include injunctions and damages.
How can Prime Lawyers help you?
Our employment law staff are experienced in representing clients in this field. They ensure that they are up to date with any changes in employment law so that they can offer you the best possible advice, tailored to your individual circumstances. Prime Lawyers can assist you:
- with the drafting of restraint of trade clauses;
- by providing advice on whether your actions or proposed actions are in breach a restrictive covenant;
- measures that can be taken as an employer to prevent further breach of a restrictive covenant;
or with any other issue involving restrictive covenants or restraint of trade clauses.