Restraint of Trade

In speciality businesses or in areas where an employee has peculiar knowledge of the employer’s business, disputes often arise as to what ‘outside work’ can be done by an employee during the term of employment, and also as to what knowledge or information an employee can use, or what work an employee can perform, once his or her current employment comes to an end.

Restraint of Trade clauses should be the subject of careful advice and careful drafting. They are generally used to protect the employer’s business, but, if not prepared carefully, they can be struck down if the Court feels that they are against ‘public policy’ or unfairly restrict a person’s employability.

Restraint of Trade clauses are generally used to prevent an employee from working for a competitor for a particular length of time in a particular geographic area. They are also often designed to protect an employer’s ‘client list’.

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