Examples of Restraint of Trade Clauses in Employment Contracts

February 21, 2023 adminuser No Comments

When you sign an employment contract, you may notice a section that includes a restraint of trade clause. This clause is designed to limit your ability to work in a similar field or industry after you leave your current job.

Restraint of trade clauses can take many forms, from limiting your ability to work for competitors to preventing you from starting your own business. Here are some common examples of restraint of trade clauses that you may encounter in your employment contract:

1. Non-compete agreements: This type of restraint of trade clause prohibits you from working for a competitor or starting a similar business within a certain geographic area and timeframe. For example, you may be prohibited from working for a direct competitor within a 100-mile radius for six months after leaving your job.

2. Non-solicitation agreements: This clause prevents you from soliciting your former colleagues or clients for a certain period of time after leaving your job. This can limit your ability to start your own business or work for a competitor if you have extensive contacts in your industry.

3. Confidentiality agreements: This clause requires you to keep confidential any sensitive or proprietary information you learn during your employment. This can include trade secrets, customer information, and marketing strategies.

4. Intellectual property agreements: This type of restraint of trade clause ensures that any work you create during your employment belongs to your employer, not to you. This can limit your ability to use your skills and experience in your future work, particularly if you work in a creative field.

5. Garden leave clauses: This clause requires you to stay away from work during a notice period before leaving your job. This can prevent you from immediately starting a new job and can limit your ability to earn income during that time.

It`s worth noting that not all restraint of trade clauses are enforceable, and the laws around these types of agreements can vary depending on the jurisdiction. If you have concerns about the restraint of trade clauses in your employment contract, it`s wise to consult with an employment lawyer to understand your options and rights.

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