Restraint Clauses in Employment and Sub-Contracting
14 October 2014
HHG Legal Group
Level 1, 16 Parliament Place
Most employment contracts include a restraint of trade or anti-competition clause in an attempt to protect an employer’s business interests.
Employers seek to ensure that the knowledge their employees gain in the course of their employment is not used to the detriment of their business when an employee leaves the work place.
If an employee is made redundant or dismissed the employer may lose the protection a restraint clause affords. On the other hand, if you head hunt from a competitor and a restraint clause is invoked, you may not only find your new employee is restrained from working in their role but you may also become embroiled in expensive litigation and could be potentially liable to pay your competitor’s legal costs.
Courts will enforce a reasonable restraint clause – they will weigh the need to protect the legitimate business interests of the employer against the burden a restraint places on an individual employee.
Join HHG Legal Group in a discussion about restraints of trade clauses in employment contracts including consideration of the following:
• How dismissal can affect the enforceability of a restraint clause.
• Head Hunting – risks to consider when employing your competitors’ staff.
• Drafting an enforceable restraint of trade clause – who, what, where and when?
• The practicalities of enforcing a restraint clause – injunctions, claims for damages and criminal prosecution.
HHG Legal Group
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