In employment contracts, there is commonly a clause which
prohibits an employee from working for a competitor upon
termination of his employment. It has long been established that
such a clause, commonly known as a "noncompete clause" or
a "restraint of trade clause", must be shown to be
reasonable in order to be enforceable. This principle of law was
founded on public policy considerations which seek to strike a
balance between an individual's freedom to work for himself or
herself and not (in principle) to deprive himself of his or her
labour or skills, while balancing the freedom of contract.
Over the years, remuneration packages and terms of employment
have evolved to include, amongst other things, financial incentives
for employees who remain with the employers and conversely,
financial disincentives for the employee should he resign or join a
competitor.
