A non compete clause is a clause in a contract. These clauses aim to prevent a person from carrying out competing activities against another business.
A contract may refer to these clauses as non-compete clauses, restraint clauses or restraint of trade clauses.
Read on to hear from an Australian employment lawyer on what a non compete clause is.
There is a difference between an enforceable non-compete and one that is not legally enforceable. A business should only enforce a non-compete when it is:
An unenforceable restraint is:
A legitimate business interest usually involves the need to protect confidential information, customer relationships, and trade secrets.
Here are some examples of business interests that could be protected by the clause:
Non-compete clauses may be identified in a contract by looking out for:
Restraint clauses usually appear in the following types of contracts:
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Non-compete clauses should be enforced when the business (usually an employer or new business purchaser): has advice from an employment law firm that the restraint is likely to be enforceable
Non compete clauses restrict employees from competing against their employer. A non compete clause often goes beyond prohibiting the use of confidential information and intellectual property. The aim is to
