Can I prevent an ex-employee competing with my business?
Posted on by Pardip Singhota
An employer cannot prevent an ex-employee setting up in competition or using the skills and knowledge they have gained whilst working for their employer to set up a competing business. The Courts do not like to see an individual being prevented from earning a livelihood.
However, what employers can do is to include some post termination restrictions within the contract of employment to help protect their business from being damaged by ex-employees using their skills and knowledge they have gained from their employment against their employer. This is more of an undertaking from the employee. To be enforceable, the restrictions need to be specific and fairly narrow where the employer can evidence that their business interests are genuinely threatened.
We often see contracts of employment with very wide restrictive clauses which would not be enforceable as the clauses are in all contracts regardless of the job and skills level of the role. Such clauses are not enforceable and Courts are very critical of such wide restrictions.
< Go back