Over the years, restraint of trade laws has emerged as a standard method by which employers can give maximum to their business assets when they recruit new staff in the office and when their employment ends. These trade clauses are usually included in the contracts of the employers.
They become applicable when the work ends, either by the employer or employee. A restraint of trade clause can offer you several benefits, one of which is indeed protecting your business. But, you should also understand that they will only become applicable when you can meet a specific set of requirements. This article will explain the principal reasons you will need a restraint of trade law lawyer. We will use the issues you may face in the restraint of trade clauses in our explanation so that you are aware of the various situations.
1. Restraint Of Trade Laws Is A Very Complex Area Of Law
First of all, restraint of trade laws is indeed a highly complicated field of employment law. This is because every matter involved in it is different from one another. It will also depend on any particular situation that makes the restraint of trade essential. A lawyer will closely read the employee’s contract and give advices to your employee about his or her specific situation on any restraint of trade clauses and if they have any effect on his or her prospect. A lawyer also proves to be adequate to provide a solution to legal disputes.
2. A Lawyer Will Let You Know That These Clauses Must Be Necessary
Do you know when will be a restraint of trade clause held valid? It will be valid when the clause is found to have some necessity to protect the employer’s business interests. You should keep in mind that a restraint of trade clause will not get enforced by the court if it goes beyond what is strictly needed for the business interest protection. And this is where you will need the help of a lawyer. To recover from such a situation, you must have a severe issue. It will provide various limitations on where and when an employee can work in the post-employment phase. If a court discovers that one clause was not required, another clause will likely get enforced.
3. You Will Get Valuable Advice About The Protection Of Legitimate Business Interests
The restraint of trade clauses has to be necessary and have to be able to keep legitimate business interests protected. It may include protecting various vital information like trade secrets, financial details of the business, and other information that should be kept confidential. If an employee wants to access this information, a restraint of trade clause can play a vital role in protecting the data. Apart from the restraint of trade clause, you can also use the Non-Disclosure Agreement (NDA) to do this. A restraint of trade clause attorney can help you understand how to use the clauses to keep all this critical information safe.
4. You Will Know That Restraint Of Trade Clauses Must Also Be Reasonable
It is a very important point that you should note. Even if you can prove that the restraint of trade clause has the necessities to protect your business, the court will not enforce them unless they are reasonable. A clause that is in effect for 5 years and has a radius of 30 kilometres is an ideal example of an unreasonable restraint. When you hire a lawyer, he or she will tell you the maximum time limit up to which a clause may be in effect to be reasonable.
Australian courts usually enforce restraint of trade clauses that do not exceed 12 months. Thus, a clause being in effect for 5 years may sound unreal, but the truth is that these types are also seen in courts. The 12 month-parameter is used because restricting an employee from working for more than one year will significantly violate his right to ‘earn a living. Also, a restraint of trade clause has to be very to the point. Only then it will be seen as a necessity to protect your business.
5. The Clauses Are Not Synonymous With Public Policy
In the prevailing relationship between an employer and employee, the balance is constantly shifting, especially from the rights of one party to the other. A restraint of trade clause functionally restricts an employee to earn a living, and because of this nature, they have been a very debatable topic. Suppose, the geographic boundaries are exceeded for a considerable amount of time, or the size is usually broader.
In that case, the court will give the verdict in favour of an employee’s right to work and earn a living. And as restraint of clauses involves this type of compensation, as an employer, you have to take much stress to prove why restraint of trade was essential and reasonable to protect your business interests. A qualified lawyer can be of great help to you.
6. There Is A Chance That The Court May Either Reconstruct Them Or Discard Them
If you make an attempt to enforce a restraint of trade clause or if an opposite thing happens like a former employee looks for one clause to have set aside, a court will not only reject it but will also make reconstructions. If the court finds that the period for a clause has exceeded its limit and become 18 months, then it will reduce it to make the clause more reasonable. Cascading clauses are beneficial in such cases, but the most effective way you can have a restraint of trade clause that can be enforced is to review any clause by best employment lawyers Perth.
Where To Find Employment Lawyers In The Perth Area?
Employers Lawyers Perth WA is a well-known consultancy firm where you can get the necessary contacts and references.