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NSW Am I Subject to Restraint of Trade Under Contract Law?

Discussion in 'Employment Law Forum' started by Clare T, 3 June 2016.

  1. Clare T

    Clare T Member

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    I have been contracting to the same company for 5 years and this has now come to an end after false allegations were made about my setting up in competition with them and soliciting their clients - all of which is untrue. I am considering suing the lady that made these allegations for defamation. The guy that runs the business I have contracted to has been threatening to sue me, however, there is no evidence that I have done anything - even to the extent that I was still working for him.

    However, ironically, one of my old clients caught wind of this and has contacted me directly stating that he only wants to work with me going forward. I never signed a contract during my time there so would I be OK under contract law if I now decide to work with any of my old clients that approach me directly and want to just work with me?
     
  2. Victoria S

    Victoria S Well-Known Member

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    Hi @Clare T,

    Whether you are under a restraint of trade depends on the terms of any agreement that you had with the company that you contracted to, whether verbal or in writing. If there is a restraint of trade clause it depends how it is worded - some say that you can't work within a certain geographical location or for a certain time limit within a certain area etc and some specifically state that you can't work with clients of the business.

    The only other basis on which they could sue you is use of confidential information - being client lists. But in this case, if an old client has contacted you then you haven't used confidential information to steal clients.
     
  3. Clare T

    Clare T Member

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    So given I have nothing in writing and the only thing he ever did was say that he would sue anyone that tried to steal his clients is that considered a restraint of trade?
     
  4. Victoria S

    Victoria S Well-Known Member

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    It would obviously be up to a court to decide, based on whatever evidence was put forward, whether that amounted to a verbal agreement, however i would say it was a unilateral statement by your ex boss and "stealing clients" is not against the law. It can only be the subject of a legal cause of action if there was contractual agreement not to work for certain clients for a period of time following the end of a contract.
     

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