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Restraint of Trade Clauses

What is a Restraint of Trade Clause?

Employment contracts may include restraint of trade clauses.  These clauses can prevent or restrict employees from engaging in conduct that is against the interests of the employer.  It may:

  • Prevent an employee from revealing an employer’s confidential information such as trade secrets.
  • Prevent employees from working with an employers’ competitors.
  • Prevent employees from poaching other employees from the employer’s business.
  • Prevent employees from undertaking a business similar to their employer’s within a certain area
  • Prevent employees from soliciting the employer’s customers or clients.

In general, they include a clause specifying the duration of the restraint of trade.

Are they all Enforceable?

Not every restraint of trade clause is enforceable.  In general terms, they must be reasonable to be enforceable.  Determining whether it is reasonable requires consideration of factors such as;

  • The duration of the clause.
  • The conduct which the employee is restrained from.
  • The legitimacy of the interests which the clause protects.
  • The scope of the clause.
  • The public interest.

Why choose BSM Lawyers?

The highly experienced business lawyers at Brander Smith McKnight are able to answer any questions and assist you in the review of contracts with restraint of trade clauses. We can provide expert legal advice in relation to the enforcement of the clause or conversely we can challenge an unreasonable restraint of trade clause.  The BSM lawyers will represent you in attempting to resolve the issue without litigation through negotiation, mediation, conciliation and arbitration.  We are expert negotiators and work hard to resolve differences over these clauses in the most cost effective manner, therefore saving you money.  If these avenues are unsuccessful and litigation is required we will fight for your rights in court.  Possible positive outcomes for enforcement are injunction or financial compensation for damages.

Call us to arrange a free 20 minute no obligation consultation that includes case evaluation and cost estimate.

We are conveniently located in Sutherland, Parramatta, Wollongong and Sydney CBD.

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