{"id":1912,"date":"2022-01-18T01:45:53","date_gmt":"2022-01-18T01:45:53","guid":{"rendered":"https:\/\/uk.legalvision.com.au\/?p=1912"},"modified":"2024-10-11T05:55:42","modified_gmt":"2024-10-11T04:55:42","slug":"restraint-of-trade-clause","status":"publish","type":"post","link":"https:\/\/legalvision.co.uk\/employment\/restraint-of-trade-clause\/","title":{"rendered":"What is a Restraint of Trade Clause in Employment Contracts?"},"content":{"rendered":"\n

When you have employees or workers carrying out roles within your business,<\/span> you effectively expose them to information and contacts which are precious to your business. You may, therefore, at times feel it appropriate to put limits on how they can use that information<\/span>. Such limits may be relevant w<\/span>hen an employee is carrying out their role and once they leave your business. A common method for doing this is through a restraint of trade clause in your employee\u2019s employment contract. However, if you feel this is necessary, you should ensure you do so in a way that is legal. The law around the restraint of trade is difficult to understand and changes rapidly. <\/span><\/p>\n\n\n\n

This article will explain what restraint of trade is and how it can apply to employment contracts<\/a>. It will explain when restraint of trade clauses are legal and their enforceability in the UK.<\/span><\/p>\n\n\n\n

What is a Restraint of Trade?<\/span><\/h2>\n\n\n\n

A restraint of trade restricts a person in terms of using their trade and skills as they wish. Restraint of trade is generally illegal unless the restraint complies with any legal exceptions.<\/span><\/p>\n\n\n\n

You can find restraint of trade clauses,<\/span> for example, in commercial contracts. Likewise, you can find them in employment contracts where they affect an employee’s ability to work for or trade with a competitor’s business.<\/span><\/p>\n\n\n\n

What is a Restraint of Trade Clause in an Employment Contract?<\/span><\/h2>\n\n\n\n

A restraint of trade clause is a contractual term within an employment contract<\/a> that restrains an employee or worker from taking certain actions. For example, a clause may prevent<\/span> an employee from working with a competitor’s<\/span> business once their employment ends. It can affect an employee’s conduct both whilst working for you and once they leave.<\/span><\/p>\n\n\n\n

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A restraint of trade clause is often known as a type of restrictive covenant. Restraint of trade clauses are considered to be stricter in employment contracts than commercial contracts.<\/span><\/p>\n<\/div>\n\n\n\n

For example, you may include a restraint of trade clause to ensure that they do not use information gained whilst working for you for the benefit of another competitor’s<\/span> business.<\/span><\/p>\n\n\n\n\n\n Continue reading this article below the form\n <\/i>\n<\/a>\n

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