Restraint of Trade

Restraint of trade, also known as ‘restrictive covenants’ help organisations to protect themselves against competitors getting access to their confidential or commercially sensitive information.

Restraint of trade clauses are designed to protect an organisation’s commercial and confidential information.

Employers often include ‘restrictive covenants’ or ‘trade clauses’ into employees’ contracts which means they can’t share trade secrets or confidential information outside the organisation. Sometimes they also try to prevent employees from working for similar organisations for a certain period of time in the future.

Employers considering including such clauses should seek legal advice.

Last updated: 06 August 2019