How can you use restraint of trade clauses to protect your business? There are a number of steps you can take to maximise the protection afforded by a restraint of trade clause: Ensure that contracts of employment contain restraint clauses with reasonable time and geographical locations. Consider what is reasonable to protect your genuine business interests. For example, it may not be reasonable to restrain an employee from competing with your business anywhere in Australia if you run a business that only services one regional area of New South Wales.
Regularly review contracts to ensure that restraints reflect changes in business activities and employee roles. When employees resign, ensure that you remind them of their post-employment obligations. If you consider a departing employee to carry a high risk of breach, formally remind them of their obligations in writing.
Ensure that the employment agreement adequately covers confidential information and intellectual property. It should be made clear that any intellectual property created during employment is the property of the employer.
The agreement should also contain clauses requiring the return of any records pertaining to confidential information or intellectual property, including both hard-copies and computer hardware. If you believe that an employee may be breaching a restraint, put them on notice as soon as possible and seek legal advice.
Three key features which must apply for restraint clauses to be valid are:. If the clause goes beyond what is reasonably necessary to protect a legitimate business interest, the court will not enforce it. Unfortunately for employers, it is well established that an employer does not have a legitimate interest when simply protecting itself from competition. A recent decision out of the District Court in Queensland has reinforced this view.
The Court found this clause to be unreasonable. Categories Business Clients Employment. What does Restraint of Trade mean? Related posts. Partner with Kainga Ora to buy your first home Read more. Personal grievances — A brief overview Read more. Smart watches for our kids — How safe are they? Read more.
0コメント