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Does your business have the right restraint of trade clause?

There are a number of restraint clauses in employment agreements including:

  1. Non-complete clause: this is a clause directed at preventing a person working for a competitor for a specified period of time.
  2. Non-solicitation clause: this is a clause directed at restraining a person from poaching clients, customers, or other employees of the company for a specified period of time.
  3. Non-disclosure clause: this is a clause directed at preventing the use or disclosure of confidential information obtained in the course of employment.
  4. Pay-secrecy clause: this is clause directed at preventing employees from disclosing their wages with other employees. These clauses can no longer be included in employment agreements from 7 December 2022.

The federal government researchers found that 22% of employees had a non-compete clause in their employment agreement and 26% of employees signed a non-disclosure agreement relating to confidential information. Nearly half of the gig workers reported a non-compete clause in their contract.

Courts can enforce non-compete and non-solicitation clauses if it is shown to be reasonably necessary to protect the employer’s legitimate business interests.

We would be happy to provide your business with advice in relation to these clauses in order to protect your business from harm.

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