Australia – Protecting Your Company’s Customers and Confidential Information

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In a thriving economy, companies may not be as worried about losing a little business here and there because they are likely picking it up elsewhere. That is not the case in today’s business climate as companies are fighting and scratching to hold onto every customer they can. In an effort to protect valuable goodwill and assets, many employers insist that confidentiality and restraint of trade clauses are contained in their employees’ contracts of employment. In general, these employment contracts are used to restrict employees from competing with the employer after their employment comes to an end.

The interests of the employer which a restraint on trade seeks to protect is known as its protectable interests. As specific needs have arisen, restraint clauses have acquired other names with particular purposes. For instance, non-solicitation clauses prohibit former employees from soliciting former clients/customers; non-poaching clauses prohibit former employees from hiring away (or “raiding” or “poaching”) the employer’s current employees; and non-compete clauses prohibit former employees from working in a competitive business to that of the former employer. Whether these various agreements are separate contracts or separate provisions in one agreement, the purpose is usually the same - to prevent unfair competition from former employees.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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