Non-compete clauses

Before signing an employment agreement make sure that you read and understand all parts of the contract, particularly any non-compete and restraint of trade clauses. Non-compete clauses are post-termination provisions which restrict your right to set up a competing business, usually within a geographical area and for a specific period of time. If you believe a non-compete or restraint provision is or will be unreasonable, you should consider negotiating a change in the clause before signing the contract.

Non-compete clauses can have serious consequences for your future employment and business opportunities, and the breach of a clause can lead to costly litigation.  If you are negotiating a new employment contract or if you need legal advice regarding your current contract, Maurice Blackburn are the nationally acknowledged employment law specialists.

Talk to Maurice Blackburn today about our employment contract legal services.

Is the non-compete clause reasonable?

Employers often seek to protect themselves by using a series of restraints presented as ‘cascading’ clauses; in the hope that one, if not all, of the clauses will be upheld.  However in a number of cases the courts have found such sub-clauses to be unenforceable as there is no certainty as to the extent of the restraint, because the restraint provision contained no mechanism for the selection of which of the clauses was to operate.

Maurice Blackburn have successfully resolved a number of such cases. We are the experts in employment law and will achieve the best result for you

Is your non-compete clause valid?

When a restrictive provision, such as a non-compete or restraint of trade clause, exists as part of an employment contract, the validity of the contract will affect the enforceability of any provisions.  This means that a non-compete clause contained in your employment contract is only enforceable if that employment contract is still in operation at the time your employment ceases.  If your employer has, by their actions, repudiated your contract, then the provisions of the contract are void.  This is an important fact to consider in relation to existing employment contracts.

Maurice Blackburn has a winning record in employment contract law, talk to one of our employment law experts about how we can help you.

Successful cases

Hanna v OAMPS

Hanna v OAMPS Insurance Brokers Ltd [2010] NSWCA 267

In 2010 Maurice Blackburn successfully represented Mr Hanna in his case against his former employer. This case is an example of a cascading restraint of contract clause where the employment contract contained nine separate restraints which served to extend the restraint period.

Mr Hanna’s position was upheld by the New South Wales Court of Appeal, which found that the minimum restraint period of 12 months throughout Australia was reasonable to protect the employer's legitimate business interests.

 

Fishlock v The Campaign Palace

Fishlock v The Campaign Palace Pty Ltd [2013] NSWSC 531

Mr Fishlock was the executive creative director of the Campaign Palace where he was responsible for management of creative staff and productivity and management the Sydney and Melbourne creativity divisions of the company.


Mr Fishlock had been working in this role for eight years when he was informed by the employer by email that his responsibilities would be significantly cut, including a loss of overseeing the Sydney and Melbourne divisions.

He brought a claim for compensation on the grounds that the employer had repudiated his employment contract. He also sought a declaration from the Court in order to declare the restraint of trade clauses in his employment contract as being invalid and unenforceable.
The NSW Supreme Court found that the employer had repudiated Mr Fishlock’s employment contract, and as a result, the employer was not entitled to the benefit of the restraint of trade provision in the employment contract.

Mr Fishlock received $268,259.00 in damages in relation to the employer’s repudiation of his contract.

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