Are restraint of trade clauses enforceable?

Are restraint of trade clauses enforceable?

Strictly speaking, restraint of trade clauses are not fully enforceable. Under the common law doctrine of restraint of trade clauses, such clauses are presumed to be void and unenforceable as contrary to public policy.

What is a restraint period in an employment contract?

A typical restraint clause prevents a departing employee from working for a competitor in any capacity for a specified period. Other restrictions may also be included, such as not soliciting a former employer’s clients, customers or staff, and not using a former employer’s confidential information.

Is the employment restraint of trade clause valid?

Restraint of trade clauses are most commonly found in employment and partnership contracts, which usually takes effect after termination of the contract, or in sale of a business or practice. As with other contracts, restraint of trade agreements are presumed to be prima facie valid and enforceable.

Can my current employer stop me working for a competitor?

No matter what’s in your contract, your old employer can’t stop you taking a new job unless it could lose them money. For example if you might: take customers to your new employer when you leave. start a competing business in the same local area.

How do I get out of a restraint of trade?

An employee who wants to be released from a contract in restraint of trade must be able to persuade the court that his or her right to work outweighs the potential prejudice his ex-employer could potentially suffer if the employee leaves and competes with the ex-employer in the open market.

What is a restraint of trade clause?

Restraint of trade clauses are included in employment contracts to protect an employer’s trade secrets, confidential information and customer and staff connections, by restricting an employee’s activities after they have left the employment.

Does restraint of trade apply when fired?

The restraint of trade agreement generally becomes operative at the moment of the termination of the employment agreement.

Can my employer change my contract without my consent?

If you don’t have a copy of your contract, ask your employer. There may be clauses in your contract which gives your employer the right to make reasonable changes without your consent, for instance: A general ‘variation clause’ might allow your employer to make some changes to your terms.

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