Post-employment restraint clauses regularly feature within employment contracts but are often overlooked or assumed to be unenforceable. They seek to prevent an employee from engaging in certain activities after their employment ends to protect the employer’s business interests.

There are various types of restraint clauses:

Non-compete

Non-compete clauses seek to prevent an employee from working with a competitor of the employer. Typical applications are where an employee can’t work for a competitor within a specified time frame or geographic area.

Non-solicit

Non-solicit clauses seek to prevent an employee from taking clients, employees, contractors, and suppliers from the business after they leave. The scope of a non-solicit clause may also include restrictions based on time and geography.

Confidential Information

Confidential information clauses seek to prevent an employee from using confidential information belonging to the employer after they leave.

Enforcement of post-employment restraints

Post-employment restraints will generally be considered enforceable where the scope of the restraint goes no further than is reasonably necessary to protect the employer’s legitimate business interests.
When determining whether a restraint is “reasonably necessary”, several factors are considered, including the nature of the business and industry, the employee’s seniority, access to clients, other staff members and commercially sensitive information.

For employees

Starting a new job can be exciting. However, failure to carefully consider restraint clauses in your employment contract upfront can create adverse issues in the longer term.

At DKL, we help employees navigate the restraint issues that may arise within existing and new employment contract negotiations. We can help determine which included restraints might apply and be enforceable.

For employers

Having carefully-drafted restraint clauses in employee contracts is essential to protecting your business. While it might seem logical to include broad post-employment restraint clauses in pursuit of maximum protection, a poorly worded clause may render it unenforceable.
Employment law issues can be complex, so we work closely with our clients to tailor restraint clauses and provide practical advice and training on how they operate in practice.

If you are aware of, or suspect, an employee has breached their post-employment restraint obligations, you should immediately seek legal advice. To successfully enforce a post-employment restraint, you must act as soon as you become aware of a potential breach.

Why choose DKL?

At DKL, we have extensive experience advising both employers and employees on post-employment restraint issues, taking into account the legal and personal issues that matter.
Post-employment restraint clauses can be a complex area of law, and we provide clients with practical and time-sensitive advice specific to each situation.

Our highly experienced employment lawyers will work alongside you to achieve a successful outcome with your contract. Call us on +61 (2) 9233 5669, email hello@dannykinglegal.com or submit a webform to speak to one of our onboarding team about how we can help you.