When leaving your employer to start your own business, there are certain things to consider if your new business is in the same field or industry as your former employer.
Employment Contract
The employment contract signed between you and your employer is a key document to review when considering leaving your current employment and beginning your new business. You need to be aware of the terms of your employment to prevent breaches of your contract.
Confidential Information
During your employment, you would likely have become aware of information that is confidential. It is important you do not use or disclose confidential information or take any electronic or physical information that is confidential. This may result in your former employer taking legal action against you for breach of confidence, and potentially being liable for damages, equitable compensation or an account of profits if this information is used in your new business.
Gaining Improper Advantage
Section 182 of the Corporations Act 2001 (Cth) provides that a director, secretary, other officer or employee of a corporation must not improperly use their position to:
- gain an advantage for themselves or someone else; or
- cause detriment to the corporation.
Under section 183 of the Corporations Act 2001 (Cth), a person who obtains information because they are, or have been, a director, other officer or employee of a corporation must not improperly use the information to;
- gain an advantage for themselves or someone else; or
- cause detriment to the corporation.
In summary, if you are a director, other officer or employee of a corporation, you must not use your position or any information improperly obtained as a result of your position to gain advantage for yourself or your new business or to cause detriment to your former employer.
If you are considering leaving your employer to start a new business in a similar field or your former employer has taken legal action against you, contact the Litigation and Disputes team at Antunes Lawyers on (02 9964 0499) to discuss your situation.
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The articles on this website comprise legal general information and not legal advice. The general information presented here must not be relied upon without legal advice being sought. In the event that you wish to obtain legal advice on the contents of this general information you may do so by contacting our office or your existing solicitor.