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Employment Relations: Employment agreement builder

Section 11: Obligations – Restraint of Trade

Employers are asked to seek advice on the scope of any restraint of trade clauses they intend to include in an employment agreement. In order to be enforceable, the scope and duration of the clause needs to be reasonable in the circumstances of the particular case, and as such generic or general clauses are of limited value.

Non-Competition
 
The Employee agrees that for a period of following the termination of their employment for whatever reason, they shall not, either personally, or as an employee, consultant or agent for any other entity or employer, carry on business in competition with the Employer within a radius of kilometres from the employer’s premises.


Non-Solicitation of Clients
 
The Employee agrees that for a period of following the termination of their employment for whatever reason, they shall not, either personally, or as an employee, consultant or agent for any other entity or employer, seek to solicit or carry out any work of the same nature for any client or customer of the Employer with which the Employee had any contact or dealings whilst employed by the Employer.


Non-Solicitation of Employees
 
The Employee agrees that for a period of following the termination of their employment for whatever reason, they shall not, either personally, or as an employee, consultant or agent for any other entity or employer, solicit or engage or employ any employee of the Employer with whom the Employee had any dealings whilst employed with the Employer.


Severability
 
In the event any portion of this clause is viewed as unenforceable by any Authority or Court with jurisdiction to consider such clauses, the clause shall apply as modified by the Authority or the Court, or in the event it is not modified by the Authority or Court, the remainder of this clause and agreement shall continue to be enforceable by the parties.
About OER | Department of Labour, May 2006. © The Crown