Respond to a restraint of trade clause
Stopped from taking the next role? Test whether the restraint actually holds up.
Most post-employment restraint clauses are drafted wider than the law will actually enforce. Non-competes that purport to stop you working for any competitor in any state for two years are often unenforceable, even when they are signed and binding on paper. We assess the restraint against the legal test for reasonableness, weigh up the employer’s legitimate business interest, and work out the safest path: defend, negotiate down, or proceed and litigate if the employer challenges you.
What is a restraint of trade clause?
A restraint of trade clause is a post-employment obligation that limits what you can do after the employment ends. Non-competes prevent you from working for competitors; non-solicitation clauses prevent you from approaching clients or staff; non-poaching clauses prevent you from hiring former colleagues. Under common law in Australia, a restraint is only enforceable to the extent it is reasonably necessary to protect a legitimate business interest of the employer; anything wider is void. The Fair Work Act 2009 (Cth) does not directly regulate restraints, but the courts apply the reasonableness test strictly. Most non-competes that try to stop an employee working in their area of expertise for long periods are found to go too far.
Are post-employment restraint clauses always enforceable?
No. A restraint is only enforceable to the extent it is reasonably necessary to protect a legitimate business interest of the employer, such as client connections, confidential information, or trade secrets. Restraints that are wider in time, area or activity than what is reasonably necessary are void at common law. Each restraint is tested on its specific drafting and the facts.
What is the difference between a non-compete and a non-solicitation clause?
A non-compete restrains you from working for, or being involved in, a competing business. A non-solicitation clause restrains you from approaching the employer’s clients, suppliers or staff. Non-solicitation clauses are more often enforceable because they protect a specific legitimate interest; non-competes are more often found to go too far because they prevent you from earning a living in your area of expertise.
Can my employer get an injunction to stop me starting a new role?
An employer can apply for an injunction in the Supreme Court if it believes you are about to breach an enforceable restraint. Whether the application succeeds depends on whether the restraint is enforceable and whether the employer can show the breach will cause irreparable harm. Most injunction applications turn on the same reasonableness test the substantive case turns on.
Can I negotiate the restraint before I sign the contract, or after I leave?
Yes. Restraints can be negotiated on entry (narrowed scope, shorter period, smaller geographic area) and on exit (waived or narrowed in exchange for a deed of release). Once a dispute has started, restraints are often the most negotiable term because the employer’s actual legitimate interest is usually narrower than the drafted clause.
Restraint tested.
We apply the reasonableness test to your specific clause and circumstances.
Path mapped.
Defend, negotiate down, or proceed with the next role on a clear legal footing.
Injunction risk managed.
We assess the employer's actual position and the realistic risk of court action.
Got a restraint clause blocking your next move?
Most restraints are wider than the law will enforce. The first call works out whether yours is one of them.
You have a job offer. The restraint clause is blocking it.
Your former employer is pointing to a restraint clause and either threatening legal action or sending a letter saying you cannot take the role. You do not know whether the restraint is enforceable, whether the employer will actually go to court, or whether to back off the new opportunity, negotiate the restraint down, or proceed and deal with whatever comes next.
- We will analyse the restraint against the legal test for reasonableness.
- We will assess the employer's actual legitimate business interest and the scope it justifies.
- We will advise on whether to proceed, negotiate, or stand off the new role.
- We will draft the response to the employer if they have sent a cease-and-desist letter.
- We will defend any injunction application or restraint proceeding if it comes.
A restraint clause is standing between you and your next role.
You have a job offer that is the next logical step in your career, but your former employer is pointing to a restraint clause in the employment contract you signed years ago. The clause looks broad, the employer has hired lawyers, and the new employer wants reassurance before the start date. You need to know whether the restraint actually binds you, what the worst case looks like, and how to get the offer across the line without ending up in court.
What's included in your restraint response service
- Analysis of the restraint clause against common-law enforceability.
- Assessment of the employer's legitimate business interest and the scope reasonably necessary to protect it.
- Advice on whether to proceed, negotiate down, or stand off the new role.
- Response correspondence to the employer's lawyers.
- Negotiation of a narrowed or waived restraint, often via deed of release.
- Defence of injunction or restraint proceedings if commenced.
What goes wrong when restraints are taken at face value.
Employees regularly walk away from career-defining opportunities because a restraint clause on the page looks final, when in fact the clause is unenforceable as drafted. The two-year, all-states, all-competitors non-compete that scares the new employer off is rarely the restraint the law would actually uphold. On the other side, employees who proceed without testing the restraint sometimes walk into an injunction application that suspends the new role, generates legal costs, and damages the relationship with the new employer before it has even started. Both outcomes are avoidable with the right assessment up front.
Here is how we work out whether the restraint actually binds you.
We read the restraint clause carefully, identify what the employer’s actual legitimate interest is, and apply the reasonableness test the courts use. Where the restraint goes wider than the interest justifies, we draft a response that sets out the position clearly and gives the employer the choice of negotiating it down or proceeding to a court that will likely strike most of it out. Where there is a real legitimate interest, we negotiate the restraint down to what is enforceable and document the narrowed terms in a side letter or a deed. By the time the new role starts, the restraint position is clear, the employer either knows it cannot enforce or has signed off on the narrowed version, and the new role is not at risk.
Three steps to clearing the restraint.
Analyse, respond, negotiate.
1
Restraint analysed.
We test the clause against the legal test for reasonableness and the employer's actual legitimate interest.
2
Position taken.
We write to the employer with the response, with the legal position set out clearly.
3
Path cleared.
We negotiate the narrowed or waived restraint, or defend the injunction proceedings if filed.
Employment lawyers who test and clear restraints for employees taking the next role.
Walking away from a career opportunity because of an over-drafted restraint clause is one of the most avoidable losses in employment law. We have tested restraint clauses across sales, professional services, financial services and technology, and the pattern is consistent: most restraints are wider than the law will enforce, and most disputes can be resolved without the matter reaching a Supreme Court hearing. Our team analyses the restraint properly, drafts the response that sets up the negotiation, and runs the litigation if the employer pushes. The new role starts on time, on a clear legal footing.
We understand you want to know the cost, before we get started...
We will map out our process, from beginning to end, so you know what the journey will look like before you get started.
We will provide you with a clear and detailed Work Proposal covering each step along the way.
Our fair fees are all-inclusive. No hidden costs for telephone calls, emails, photocopying, couriers, or coffee.
Test the restraint before you turn down the role.
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