It is often the perception of employers that post employment restraints are not an important aspect of employment contracts. Nothing could be further from the truth. Post employment restraints that restrict employees from undertaking work for clients whether personally or as employees of a third party are regularly upheld by courts.
Recently, a restraint that was put in place by an employer prohibiting an employee from working anywhere in Australia in their industry was upheld by the Supreme Court. This resulted in the former employee having to pay his former employer over half a million dollars in damages for taking a key client.
Post employment restraints are a key aspect to any employment contract where staff have regular customer contact or develop an intimate knowledge of the key workings of your business.
What value would you put on losing your best customer(s)? The upfront investment in a properly drafted restraint pays for itself many times over.
For further information please contact:
Warwick Ryan, Partner
Phone: +61 2 9233 5544
Email: wpr@swaab.com.au
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
