Restraint of trade


An employer may insert a clause into your contract of employment that prevents or sets limits on you working for a competitor. Courts or tribunals would normally rule against a blanket ban on working for a competitor because it would be a 'restraint of trade'  a general legal principle used to stop attempts to stifle competition. However, specific restrictions – known as restrictive covenants – may be allowed if they are reasonably justified as protecting the employer's legitimate business interests.