It is common in employment contracts that restraint clauses are incorporated into the employment contract which become active upon the termination of one’s employment.

Employers generally include restraint provisions in their employment contracts to protect the best interests of their company.

Such interests include the protection of the business’ confidential information and trade secrets, the employees future employment with a competitor for a particular period after they leave the original business, the employee’s establishment of a competing company and the soliciting of client’s/customers and staff of the business.

A restraint provision within a contract is enforceable to the extent that it is reasonably necessary to protect the legitimate business interests of the company.

The wording of a restraint provision is imperative when determining what is a reasonable period and geographical area of restraint and what is reasonable in the circumstances.

Legal proceedings can be commenced by the employer in which they seek to enforce the restraint provisions and seek damages from previous employees in breach of those provisions.

Relief sought by the employer can include:

  • Damages
  • Account of profits
  • Equitable compensation

Whether you are the employer or employee, it is crucial to have the restraint provisions within the employment contract reviewed. In the circumstances of an employer, legal advice should be sought to determine whether the restraints sought are reasonable and whether such restraints are likely to be upheld by the court.

If you are an employee, our expert employment lawyers can assist and advise you prior to executing your contract of employment or upon your termination of employment, understand the effect and impact the restraint provisions can have on you.

Talk to one of our expert lawyers today.