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Jersey Employment Law – Restraint of Trade | Parslows Lawyers

Restraint of Trade

Employers commonly use post-employment restraint of trade clauses (“Restraint of Trade Clauses”) to protect them from employees soliciting the employer’s customers and retaining confidential information after having their employment with the Employer terminated.

The usual restraints

The usual restraints which operate at the expiration of the period of employment include restraining a former employee from “soliciting” or “enticing” the former employer’s:-

  • Clients
  • Employees.
  • Business contacts such as intermediaries.

The restrictions generally imposed on a former employee are the following:-

  • The non-disclosure to others of confidential information and knowledge acquired during the employment or use therein.
  • Not acting (either directly or indirectly) for former clients of the Employer
  • Not employing employees of the Employer

Validity of Restraint of Trade Clauses

The common law position in relating to Restraint of Trade Clauses was set out in the leading Jersey case of Rossborough v Boon & Aziz.

In determining whether a restraint is reasonably necessary to protect the employer’s interests, the Royal Court will have to consider the following factors:-

  • The nature of the “protectable” business interests to protect
  • The nature and geographical spread of the employer’s business
  • The time period of the restraint’s application
  • The extent of the geographical restraint
  • The structure of the employer’s client base and the business goodwill
  • The characteristics of the employee, including his or her seniority, duties and possession of trade secrets and confidential information

The Royal Court will also compare the employer’s protectable interest with the relevant employee characteristics to evaluate whether the restraint goes beyond what is necessary to safeguard the employer’s protectable interest. In effect such a clause is void or unenforceable unless it imposes no greater restraint than that which is reasonably necessary for the protection of the legitimate interests of the party seeking to uphold it.

Employees need to carefully consider the Restraint of Trade Clause prior to signing an employment contract and employers need to consider how to best protect their interests.

How Parslows can help

Parslows employment law team provide an exceptional service to all our clients, whether you are an employee or employer.

Our employment lawyers are focused on providing you with expert advice with a truly personal service.

We advise on all aspects of employment law: whether it be advice on employment contracts, handbooks or restraint of trade advice or HR advisory.

Our clients are pleased with our service and fees, we are confident you will too.

For further information please do not hesitate to email us at employmentlaw@parslowsjersey.com  or call 630530;

The information and opinion expressed in this briefing does not purport to be definitive or comprehensive and are not intended to provide professional advice. For specific advice, please contact Parslows, we are not responsible for, and do not accept any responsibility or liability in connection with, the content of this document or any reliance upon it

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