Hi there, I believe that I am illegally facing restraint of trade. I work in a pharmaceuticals business.
In my contract of employment there are several restraints of trade I believe, there are so many terms that prevent me from being able to work in local competitors of my employers and being able to discuss information about my employer in interviews with other organisations. Surely such restrain of trade is illegal. When is restraint of trade allowed?
The Answer from Solicitors Online
Restraint of Trade
A contract that causes restraint of trade is one that restrains a person of their liberty to carry on their trade, business or profession in such a manner as they choose.
Generally all contracts that put a restraint on a person’s ability to trade are void. However they may be allowed in the case that they are reasonable in light of the characteristics of the parties in the contract and the best interests of the public.
Employer – Employee Restraints
A contract between an employer and employee that puts a restraint on the trade of the employee will be illegal if it solely exists to restrict competition.
An employer attempting to put a restraint of trade on an employee must have a proprietary interest worth protecting such as trade secrets, secret processes and formulae or confidential information in order for the restraint of trade to be legal.
Restraint of trade to protect a customer base
A restraint of trade to protect a businesses customer base and prevent an employee from taking away their customers in the case the employee leaves may be regarded as reasonable.
However the restraint of trade must not be more than reasonably necessary to protect the employer’s interests.
Agreement between employers to restrain trade
An agreement between employers in which they agree not to employ each other’s former employers will be regarded as an unreasonable restraint of trade on their employees.
If you need legal advice on restraint of trade, you can speak to one of our Solicitors online right now.