Post-employment Restraints

In no area of employment law are the stakes higher than post-employment restraints. Employers need to protect their business and employees need to ensure that they can work in their chosen field, after the employment relationship ends.

As a starting point all restrictions on employees competing with their former employer by setting up or going to work for a rival business, approaching and attempting to entice away former clients and or co-workers, are unenforceable as a restraint of trade.

Carefully worded, clauses in employment contracts can restrict an employee from setting up in competition, working for a rival, approaching former clients and/or staff of their former employer, for a period of time, as long as those restraints are reasonable in the circumstances of the employment relationship when they are agreed to.

What constitutes reasonable restraints depends on the particular circumstances of the positions and the employee, and if challenged or attempted to be enforced in court, the onus is on the employer to prove that it had a legitimate interest in imposing the restraint and that the restraint is no wider than is reasonably necessary.

Employees should not sign contracts containing restraints on their post employment activities unless they are confident they can comply with them and make a living once the employment relationship ends. While these restraints may ultimately be found to be unenforceable, the former employee may end up paying legal fees in defending themselves for simply trying to make a living post employment.