Restraint of trade enforced against employee…

The Employment Relations Authority has upheld a restraint of trade clause in an employment agreement.  The employee was not to do any work for any clients of the employer that they had dealings with while employed for a period of six months.  The employee resigned and immediately went to work for a client of the employer that she had worked with. 

The ERA held that the restraint to prevent a worker working for clients, doing the work that the employer does was reasonable.  It also held that the six month restraint period was reasonable and that the balance of convenience and justice favoured issuing an interim injunction.

The Employment Relations Authority issued an interim injunction to prevent the employee working for the six month period following her resignation or the earlier determination by the Authority of the full case on this matter.  The ERA said it considered that the employer had a strong case to enforce the restraint of trade at the full hearing.

Alan Knowsley

Employment Lawyer Wellington