If your business is vulnerable to competition from a departing employee, whether from an existing competitor he or she joins or from a new business he or she establishes, you should include in your contract of employment and undertaking in restraint of trade. Statements to the effect that such clauses are “not worth the paper they are written on” are misleading. Whilst it may be the case for a badly drafted restraint of trade clause, a well drafted restraint of trade clause will likely be upheld and enforced by the courts.
The key, of course, is to have a well drafted restraint of trade clause, which is where we can help you.
We will consider your operations and the roles of the particular employees involved and develop a restraint of trade clause that adequately protects your interests without being oppressive to the departing employee. In the case of very senior employees, this may be in the form of a prohibition on competition or on joining a competitor. In other cases, the clauses will prohibit soliciting or accepting business from your clients and prohibit the use of your confidential information.
If you are looking to engage a person who is subject to a restraint of trade clause, we will advise you on whether or not the particular clause presents a problem to you.
We will also act as your representative in any litigation involving a restraint of trade clause, whether that litigation involves enforcing the clause or challenging the validity of the clause.