Restraint of trade not enforced despite employee breaching its terms…

An employer filed for an interim injunction in the Employment Relations Authority seeking to enforce a restraint of trade provision in a former employee’s employment agreement.

After 8 months of work the employee decided to resign. They then began working nearby at a company offering similar services.

The employer claimed this was a breach of the restraint of trade clause in their employment contract. Terms agreed were that the employee would be restrained from working within a 100km radius for 6 months after resigning.

It was observed by the Authority that the contract was signed in a ‘hasty fashion’ and the terms were not considered to be clearly drafted. However, it was found that some of the information the employee collected during employment was capable of protection. Based on this, the clause was held to be reasonable by the Authority.

However, the Authority also considered the balance of convenience and overall justice. Both were found in favour of the employee.

It held that preventing the employee from earning a livelihood in their current role would not serve overall justice. Allowing the restraint of trade would also tip the balance of convenience too far towards the employer.

Although the employee originally breached the employment agreement provision by contracting with a similar business, it was only for a short term. Their current role complies with the restraint and the employee appears to be acting with caution. As a result, the injunction sought by the employer was not granted.

It was stressed that employment relationships need to be taken seriously and complied with.

Some agreements will not contain clear language and getting assistance from an employment lawyer who understands the terms and wording of the contract can help clarify these terms.

Leading law firms committed to helping clients cost-effectively will have a range of fixed-price Initial Consultations to suit most people’s needs in quickly learning what their options are.  At Rainey Collins we have an experienced team who can answer your questions and put you on the right track.