Restraints of Trade (Part 3): The Future of Restraints of Trade

Velocity Legal

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Key Insights

Restraints are only one part of protecting a business. The episode broadens the discussion beyond restraint clauses and looks at how they interact with other areas of law, including the protection of confidential information. Businesses should not assume that a restraint clause alone will address every risk that arises when an employee leaves.
Departing employees can create risk before any competition begins. A key issue is what happens when an employee seeks to take clients or use information to support a new venture. The risk is not only future competition itself, but whether client relationships or business information are being used to gain a head start.
Non-compete clauses may face future change. Andrew and Katherine look ahead to potential reforms that could affect how non-compete clauses are used in Australia. Businesses that rely on restraints should understand that this area may continue to develop, and restraint strategies may need to adapt over time.

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Restraints of trade do not operate in isolation.

In the final episode of this Explain That series on restraints of trade, Andrew Henshaw is joined by Katherine Stewart to discuss how restraints interact with other areas of law, including the protection of confidential information.

Following Part 1, which introduced the role of restraints, and Part 2, which looked at recent case studies, this episode turns to the practical risks businesses face when a departing employee seeks to take clients or information to support a new venture.

The discussion covers:

how restraints of trade interact with other areas of law;
the role of confidential information in restraint issues;
practical risks when an employee leaves and seeks to take clients;
what businesses should consider when a departing employee may use information to springboard a new venture;
practical steps businesses can take to manage risk when an employee is departing;
the future of restraints of trade in Australia;
potential reforms affecting the use of non-compete clauses; and
what businesses should watch as the law in this area develops.

A practical discussion for employers and business owners dealing with employee exits, client relationships, confidential information, restraint clauses or potential non-compete reform.

For advice on restraint clauses, confidential information, employment arrangements or employee exit risks, contact Velocity Legal.

This podcast in no way constitutes legal advice. It is general in nature and is the opinion of the author only. You should seek legal advice tailored to your individual circumstances before acting on anything related to this podcast.

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