QLD Restraint Period in Employment Contract - Can They Sue Me?

[A Hill]

Hi.

I work as an educator in the early childhood education industry. I just handed in my letter of resignation and my employer told me to check my employment contract for the Restraint Period /Area. It appeared vague to me at the time as it listed three: 4 months if within 50km or 2 months if within 25km or 1 month if within 10km.

We live in a really small town and the other Centre is only about 2km away. I thought I was doing the right thing by giving them 4 weeks notice (I only had to give 2), and a 3 week break between jobs. When I asked them to clarify what time period they expected, they confirmed 4 months and have threatened with legal action if I breach it.

I am not in a financial situation to have no income for 4 months, and I did apply for jobs in different industries, however, I was unsuccessful in attaining one. I already pleaded with them to waive the clause as I am not in a position to solicit families, suppliers or other employees - my role is as an educator and the other Centre has waiting lists 12 months long.

They were looking for new staff to open an extra room to expand their business and I was one of three new employees to be chosen. I guess I'm wondering if they can indeed sue me, and for how much? Can they stop me from working in my new job if start work before May?

How is it fair and reasonable for them to demand I don't work until May? How does that even protect their business?

My last day at work is 21 December and I'm due to start my new job on 16 January. Any help is welcome (as I am in the process of obtaining legal advice, it's just a busy time of year and I'm getting anxious for some feedback).

Many thanks.

 

[@thelawbundle]

Hi A Hill,

First, it will be necessary to consider the wording of the restraint clause carefully. Is it restricting you from being an educator in the childhood industry? From what you've said - the clause appears very vague and so it would be difficult for this Company to prove that you've actually breached the restraint clause at all (in which case, a Court is unlikely to enforce that clause).

Generally, Courts are reluctant to stop people "plying their trade" and so a Court would likely interpret this clause in your favour if it is vague. From what you've said, you do not intend to solicit business from the Company or to divert a business opportunity from it (which again means that a Court is likely to interpret a vague clause in your favour).

Practically, the risk that you are facing is that the Company may apply for an order (an injunction) to stop you working in your new job, and perhaps damages for an "account of profits" that they may have lost by you breaching the restraint clause. You know the Company better than I do - but from what you've said, it would be strange for the Company to go to the time and effort of applying to a Court for such an order (especially if they aren't going to suffer any financial loss by you breaching the clause).

Hope that helps and wishes.

 

[Tim W]

We have answered many similar questions.
You may find a search of the archives helpful.

 

[A Hill]

Thanks very much to you both for your responses, I really appreciate it.