NSW Restraint of Trade Terms - Can I Work for Competitor?
- Thread starter Buggle
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- restraint of trade
Hi,
My partner is looking at getting a new job due to the boss being unreasonable and such. However there's a pretty significant restraint of trade in the contract and I'm afraid this will stop them getting a job in their qualified field.
Without specifics of 'companies', they work for a supplier that has outlets. The stipulations of the contract include,
"During employment and restraint period will not be employed, engaged, concerned or interested in any business activity which is competition.
Shall not during restraint period and restraint area accept any approach from anyone who has been a client in the past 12 months, or who has had contact with them through the company in the past 12 months."
The restraint period is there based on the fact they will retain trade secrets and know how from the training.
Definition of restraint area,
"Any country state or territory business has been performed in the last 12 months and within 100kms of my place of work."
There doesn't seem to be a specified restraint time. It just states restraint period - it could mean 3 months, 6 months or 12 months from cessation of employment.
We are in NSW and the contract was written up in accordance with laws of Victoria...
I tried to ask a lawyer for help, however, the boss won't let them have time off to sort any of their affairs.
Can they work for a competitor?
My partner is looking at getting a new job due to the boss being unreasonable and such. However there's a pretty significant restraint of trade in the contract and I'm afraid this will stop them getting a job in their qualified field.
Without specifics of 'companies', they work for a supplier that has outlets. The stipulations of the contract include,
"During employment and restraint period will not be employed, engaged, concerned or interested in any business activity which is competition.
Shall not during restraint period and restraint area accept any approach from anyone who has been a client in the past 12 months, or who has had contact with them through the company in the past 12 months."
The restraint period is there based on the fact they will retain trade secrets and know how from the training.
Definition of restraint area,
"Any country state or territory business has been performed in the last 12 months and within 100kms of my place of work."
There doesn't seem to be a specified restraint time. It just states restraint period - it could mean 3 months, 6 months or 12 months from cessation of employment.
We are in NSW and the contract was written up in accordance with laws of Victoria...
I tried to ask a lawyer for help, however, the boss won't let them have time off to sort any of their affairs.
Can they work for a competitor?
'Know how' doesn't count as a factor. Trade secrets may be a factor but they would have to be very important and not just general secrets businesses like to keep from each other.
Bottom line is restraint of trade is hard for an employer to enforce for run of the mill jobs. A court will always allow a person to earn a living unless the previous job factors a large amount into wages for this scenario.
Bottom line is restraint of trade is hard for an employer to enforce for run of the mill jobs. A court will always allow a person to earn a living unless the previous job factors a large amount into wages for this scenario.
Hi,
Business owners often include Restraint of Trade (non-compete) clauses in agreements and they do so to protect the goodwill of their business, their business interests etc. However, the restraint of trade (non-compete) provisions have to be reasonable for them to be valid and enforceable.
The Courts, in determining whether a restraint clause is reasonable, look at whether the clause protects a genuine interest of the business and whether the limitations with respect to time period and geographical area are no greater than necessary to protect interests of the business. In Hanna v OAMPS Insurance Brokers Ltd [2010] NSWCA 267, the court held that a 12 month restraint period was sufficient and was probably the maximum that could be applied. The Company sought to rely on a 15 month restraint of trade clause.
In short, the restraints have to be reasonable for them to be valid and enforceable.
Business owners often include Restraint of Trade (non-compete) clauses in agreements and they do so to protect the goodwill of their business, their business interests etc. However, the restraint of trade (non-compete) provisions have to be reasonable for them to be valid and enforceable.
The Courts, in determining whether a restraint clause is reasonable, look at whether the clause protects a genuine interest of the business and whether the limitations with respect to time period and geographical area are no greater than necessary to protect interests of the business. In Hanna v OAMPS Insurance Brokers Ltd [2010] NSWCA 267, the court held that a 12 month restraint period was sufficient and was probably the maximum that could be applied. The Company sought to rely on a 15 month restraint of trade clause.
In short, the restraints have to be reasonable for them to be valid and enforceable.
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