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Post-employment Obligations and "Restraint of Trade"

Some employment law issues do not arise until after the end of your employment. Despite ceasing work for a particular employer, you may still be bound by continuing obligations under your former contract of employment or under common law.

The most common example of such an obligation is a restraint of trade. Restraint clauses aim to prohibit former employees from engaging in certain activities – such as working for a competitor or soliciting clients or staff – for a specified period after the cessation of employment. However, the mere fact that your former contract includes a restraint clause does not necessarily mean that the restraint clause is enforceable.

'Reasonable' restraint of trade

Generally speaking, courts will only uphold a restraint to the extent that it is reasonable. Whether a restraint is reasonable will depend on a number of factors, such as the duration and geographic application of the restraint, the scope of the restrained activities, and the way in which the restraint clause is drafted.

Before leaving your current job, check your contract of employment to see what, if any, post-employment obligations you may have.

Even if your contract is silent – or even if you do not have a written contract – you are likely to still be bound by an obligation not to misuse confidential information obtained during the course of your employment, such as trade secrets and client lists.

If you are considering leaving your job and would like advice about your post-employment obligations, or if you have already done so and your former employer is now alleging that you are in breach, please contact our employment lawyers for assistance.

Call 1300 366 441 or find us at an office near you for advice on any employment, industrial or discrimination matter.

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