Unsigned restraint of trade clause still binds employee...

The Employment Relations Authority upheld a restraint clause on an interim basis pending a full hearing. The employee claimed the clause was unenforceable but the ERA disagreed. The employer applied for an urgent interim injunction preventing the employee from breaking the restraint of trade clause. The employee went to work for a competitor within 200-400 meters of the employer’s business. This was in breach of a 2km radius restraint. The employee was also trying to entice her former employer’s customers to the new business.

The ERA decided there was an arguable case that the employee was bound by the restraint provision, despite it being contained in an unsigned employment agreement. The ERA concluded the employer was being disadvantaged and it was just and equitable to grant the interim order.

 

Alan Knowsley