Restraint of trade

[DJR]

In my line of business, restraint of trade clauses are quite common, especially where the business is sold to a new proprietor. (It is sometimes used for key professional employees as well, but not as often). The old owner is then often prohibited from starting or working in a similar business in the same area and for a fixed period. Both the area and the time must be reasonable and agreed beforehand as part of the sales contract. Often it is for and area within a 50km radius, sometimes specific municipal areas are named, depending on whether it is in the city or countryside. Often the period is for 2 or a maximum of 3 years. It is difficult and expensive to enforce, but it gets done and it is accepted by the courts. I did my homework recently because I wanted to employ a person who is bound by a restraint of trade agreement.

[IceCreamMan]

In my line of business, restraint of trade clauses are quite common, especially where the business is sold to a new proprietor. (It is sometimes used for key professional employees as well, but not as often). The old owner is then often prohibited from starting or working in a similar business in the same area and for a fixed period. Both the area and the time must be reasonable and agreed beforehand as part of the sales contract. Often it is for and area within a 50km radius, sometimes specific municipal areas are named, depending on whether it is in the city or countryside. Often the period is for 2 or a maximum of 3 years. It is difficult and expensive to enforce, but it gets done and it is accepted by the courts. I did my homework recently because I wanted to employ a person who is bound by a restraint of trade agreement.

In yr example a RoT would certainly be enforceable.

[porqui]

If it is her only means of earning an income it is going to be difficult to enforce.

[RocknRolla]

If it is her only means of earning an income it is going to be difficult to enforce.

 

I am a cabinetmaker by trade, thus, a restraint of trade would affect my ability to earn an income. Thus a ROT will not be enforceable. I do however have some insights into systems and methods that is fairly unique to my company, that is what non-disclosure is for.

[Harryn]

I am a cabinetmaker by trade, thus, a restraint of trade would affect my ability to earn an income. Thus a ROT will not be enforceable. I do however have some insights into systems and methods that is fairly unique to my company, that is what non-disclosure is for.

The problem is that there is no effective means of policing non disclosures. Hence, why a restraint is necessary to protect the company’s proprietary interests.

[RocknRolla]

The problem is that there is no effective means of policing non disclosures. Hence, why a restraint is necessary to protect the company’s proprietary interests.

 

It's a vicious circle

[dev null]

In a previous company I worked for they asked me to sign a RoT document. I refused. They never bothered to push the issue or summoned me to the head of HR, which probably meant that they knew that their RoT was not enforceable. I feel that many times the RoT document is used to scare key staff from accepting jobs at customers or competitors. Very difficult to enforce if you are a developer with very specific field knowledge.

[gemmerbal]

having been through retrenchment myself (temporary works and scaffolding industry), the ROT generally falls away if you are retrenched. my understanding is that ROT is mostly aimed to avoid people being lured away by competing companies.

 

however, if you are a director for instance, i have seen it being enforced very strictly.

 

ultimately you cannot expect someone to be unemployed because of a ROT agreement. good luck trying to enforce that.

 

take the agreement and seek legal council. that is the best possible advice.

 

good luck dude, its always a stressful situation to deal with.

[kjind]

ROT are more effective towards people in sales. Companies try to protect their client base and thus easier to enforce. The big issue to remember is the financial impact. If a company decide to use the ROT, the best way is to apply for an urgent court order in the high court, meaning you will have to appoint legal council to defend. This is expensive, especially if you lose.

[Mousea]

I good friend of mine has had ROT enforced against him and is unable to work in the Motor trade Sales for one year.

It is a hell of an expensive way to move companies cost him 200k plus trying to fight it.

[gemmerbal]

that sucks balls, sorry to hear man!

 

how was it enforced?

 

 

I good friend of mine has had ROT enforced against him and is unable to work in the Motor trade Sales for one year.

It is a hell of an expensive way to move companies cost him 200k plus trying to fight it.

[Mousea]

that sucks balls, sorry to hear man!

 

how was it enforced?

The new company he moved to will not be allowed to let his sell until February 2020.

The court ruled in his old Companys Favour.

A bit of a BS thing as far as Im concerned 

[Harryn]

The new company he moved to will not be allowed to let his sell until February 2020.

The court ruled in his old Companys Favour.

A bit of a BS thing as far as Im concerned

I am *very* interested to see the judgment. Anyway you can ask your mate to email it to me? I will pm you my email addy.

 

Thanks in advance!

[gemmerbal]

Thats not cool. I always find it interesting how you can be legally constrained to make a living. Thats just my opinion based on no legal premise. So you have to stay where you are or face unemployment for a year. How does that work?

 

Anyways, sorry to hear. Its a tough situation to be in.

 

The new company he moved to will not be allowed to let his sell until February 2020.

The court ruled in his old Companys Favour.

A bit of a BS thing as far as Im concerned

[Slowbee]

If she takes a voluntary retrenchment package, she must insist on a clause in the separation agreement releasing her from the restraint.

As always, there is a warm coffee with your name on it.

[Harryn]

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