Restraint of Trade Agreements
We provide legal advice to both employers and employees in relation to the Restraint of Trade Clauses in employment contracts.
A Restraint of Trade clause seeks to impose limitations or restrictions on an employee’s conduct after they leave employment. Often restraint clauses provide that an employee will not:
- Approach, canvass or solicit any clients or customers of the employer for a certain period of time.
- Use or disclose confidential information after leaving employment, or
- Work for a competitor of the employer’s business for a time within a defined geographic region.
These clauses are intended to protect an employers legitimate business interests – its confidential information and clients.
When are Restraint of Trade Clauses valid?
Restraint clauses are only valid and effective if they are reasonable. What is reasonable will depend upon the subject matter of the restraint, the time and area of its operation, the nature of the employer’s business and the industry in which the employer operates, the relationship of the employee to the employer’s clients and customers, and the nature of the work performed by the employee.
A court in considering whether a restraint is reasonable and valid is often asked to decide between two competing interests, an employee’s freedom to earn a living against the need of an employer to protect its legitimate business interest. An employer cannot protect itself against mere competition.
Dealing with restraint clauses is complex and Healy O’Connor Solicitors LLP provide advice to employers on the negotiation and drafting of these clauses. We also provide advice to employees in relation to the validity of these clauses.