5 Things To Consider Before Resigning To Work For a Competitor

It’s increasingly common for employees to ‘jump ship’ and work for a competitor. Maybe they were headhunted or are simply looking for a sea change in their area of expertise.

If you’re an employee moving to greener pastures, you should first consider several legal issues that could affect your ability to do so. Before handing in your resignation notice, you should ask yourself these five important questions. 

1. Am I Subject to a Restraint?

When you joined your current organisation, chances are you didn’t read the contract in detail. Who does? But buried amongst those terms and conditions is likely to be a restraint clause which, in most cases, prescribes that you cannot work for a direct competitor for a specified period in a specified area. The validity of those clauses is a complex legal question, but if it appears that your proposed move could breach that contractual provision, you should ask an employment lawyer immediately. 

2. Am I Subject to Moral Rights Provisions?

In some industries, particularly those with a little creative flair, it’s common for employment agreements to contain a moral rights clause where, in effect, an employee assigns to its employer all works or designs created during their employment. So, if you’re moving to a new role intending to finalise your design for a solar powered bike, or finish your article on the Kardashians, that piece of work usually belongs to your former employer. Consequently, you can’t use it elsewhere or, in most cases, claim the rights to it.

3. What Are My Notice Obligations?

The Fair Work Act prescribes minimum statutory notice periods which apply to both the employee and the employer. An express term in your employment contract can override these periods, typically extending the minimum requirement. 

4. What Are My Obligations With Respect to Confidentiality?

In addition to an express term contained in your employment contract, employees are subject to a common law duty of confidence, as well as a clause of the Corporations Act that provides that you can’t misuse company information to the detriment of your former employer. As such, any information falling within the realm of confidential should be kept just that, from client lists to supply arrangements, and not relied on in your new role.

5. Do I Owe my Employer Other Contractual Obligations That Survive Termination?

Some contractual clauses are said to survive the employment relationship, including those mentioned above. You should review your contract to understand better your ongoing contractual obligations.

In Short

Before tendering your resignation, make sure that you know your rights and responsibilities. Just because you want to end your employment relationship, doesn’t mean that you are free from your obligations that you owe to your employer. 

If you’re unsure, or the contract’s terms are unclear, get in touch with an employment lawyer so you can transition smoothly into your new and exciting role. 

Questions? Ask us on 1300 544 755.