The phrase can cause hives in many and most definitely with good reason. When you enter into a contract with an employer, whether permanent, part-time or contractual, especially when you are in a sales position dealing with customers, you will most likely have Restraint of Trade brought into the conversation and contract.
I always say tread lightly around signing anything with the words Restraint of Trade on it. While Labour Law does not regulate Restraint of Trade agreements, you still have some loopholes should you find yourself in a sticky situation. However, you should be addressing all angles before signing the agreement.
Simply, a Restraint of Trade cannot be enforced should the recipient of the Restraint find that their ability to make a living is affected and if the agreement is unreasonable. Further, the recipient needs to prove that they have suffered damage and that the information they are not to use is not available to the public already. That in itself is not simply worked out, as you may well know.
The agreement then needs to be reasonable and specific.
HOW TO ENSURE YOUR RESTRAINT OF TRADE IS FAIR
- Look at the employee’s designated title and job position – does this in any way allow them to perform duties/jobs other than the one they are currently in? i.e. could they make a living by doing something else they are qualified for where the Restraint would not be affected?
- Is the information related to the Restraint of Trade clause available to the public? If so, then you cannot include it in this clause as it could be used by anyone anyway
- Is the time period linked to the information reasonable, i.e. longer than a year would seem unfair
- List the information specifically in the agreement so that it is clear exactly what cannot be used outside of that agreement
NEED HELP WITH A RESTRAINT OF TRADE?
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