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NSW Employment Contract - Can Restrictive Covenant be Enforced?

Discussion in 'Employment Law Forum' started by BKG, 27 April 2016.

  1. BKG

    BKG Active Member

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    In my employment contract (1 year, ends in March 2017), it says "Restrictive Covenant. At the expiration of employment with "Blah Blah" Physiotherapy, the Physiotherapist may not be involved in any way with a physiotherapy practice, at any time within a period of 6 months within a radius of twenty (20) kilometres from any place at which Clinics of "Blah Blah" Physiotherapy operate, without the express agreement of the Directors of "Blah Blah" Physiotherapy".

    Can this actually be enforced? I've been told different things about whether it can or not. Other Physios have left and joined other practices in the region. I wish to leave the practice but don't want to move towns.
     
  2. Tim W

    Tim W Lawyer

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    Are you actual PAYG employee?
     
  3. BKG

    BKG Active Member

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    Yes I am
     
  4. Serge Gorval

    Serge Gorval Well-Known Member

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    Generally speaking, restrictive covenants are against public interests. Often times contracts incorporate what is called a cascading restraint that drops in severity. Can you advise of the specific wording in the contract ?


    Best
     
  5. BKG

    BKG Active Member

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    Those are the exact words. I only changed the company name.
     
  6. Serge Gorval

    Serge Gorval Well-Known Member

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    Imagine you were employed for 1 month since march this year. 6 month restraint on 20 kms seems excessive.

    What is your role, physiotherapist ? How big is the town? How many clinics?

    In my experience, this would not be one that I'd suggest to enforce.
     
  7. BKG

    BKG Active Member

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    Yep, Physiotherapist. There are 3 clinics, rural city with about 100,000 in area.

    Thank you for your help
     
  8. Tim W

    Tim W Lawyer

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    I agree with @Serge Gorval here.

    The principal test is one of "reasonableness in all the circumstances".
    As a general thing, if the effect of a restraint clause is to limit (what is otherwise fair market) competition,
    or to unfairly protect a monopoly in a small or closed market (eg the only physio in the village), or
    limits your right to work in the field, or is in some other way unreasonable,
    then you may find that the court would hold the restraint of trade clause to be inoperative.
     
  9. BKG

    BKG Active Member

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    Thank you
     

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