Preventing Employees From Taking Your Business Elsewhere

Article by Tamara Seale and James Baxter

Employers often dread the situation where an employee accepts employment with a competitor or sets up business in competition. Traditionally, employers have sought to prevent or limit the harm they suffer by including restraint of trade clauses in the contracts of their employees, particularly their more senior or executive employees. However, some recent decisions of the New South Wales Supreme Court demonstrate that in certain circumstances, an employer’s interests can be protected in this scenario even if an employer and employee have agreed that there will be no restraint of trade clause in the employee’s contract.