Post-employment obligations are certain duties employees are bound by even after their employment has terminated. Post-employment duties and restraints are typically set out in the employment agreement which the employee accepts and signs as a condition of employment. All employees who have recently left or intend to leave their employer must understand and fulfil these post-employment obligations. This article explores the post-employment duties of confidentiality and restraint of trade.

The Duty of Confidentiality

The duty of confidentiality is an equitable doctrine. This means that the duty can arise regardless of whether the employment agreement expressly includes the duty of confidentiality or not.

The duty of confidentiality applies to current employees and continues even after their employment has ended. This obligation ensures that an ex-employee does not use or disclose any confidential information which they have obtained during their employment. This becomes increasingly important when an ex-employee commences employment with a competitor or starts their own competing business.

If an ex-employee proposes to use confidential information, they may be restrained by way of an injunction. An injunction is a enforceable court order that requires a person to do or cease doing something, for example, cease from sharing confidential information.

However, it is important to note that there are limits to this duty. An ex-employee will be free to use the information where:

  • The employer cannot prove that the information was secret; and
  • The employer failed to take enough action to prevent it from being shared inside or outside the business.

The Doctrine of Restraint of Trade

The doctrine of restraint of trade prohibits a person from engaging in future trade or employment in circumstances where it is “reasonable” to do so.

In order to prove that the restraint is reasonable, the employer must satisfy two elements:

  1. The employer must have a legitimate interest in imposing the restraint; and
  2. The scope of the restraint is reasonable to protect their interests.

In determining whether a restraint is reasonable, the court will also consider the following factors:

  • The duration of the restraint;
  • The area of the restraint; and
  • The activities to which the restraint applies to.

Many employment contracts will often include a restraint of trade clause. Courts will look at whether these clauses can be enforced on a number of grounds, including whether it is fair. An employment lawyer can assist you with reviewing your contract before you sign it to determine whether a restraint of trade clause is reasonable.

Key Takeaways

All employees will need to adhere to the post-employment obligations which are stipulated by their employment contract and by law. Two such common duties are the duty of confidentiality and the restraint of trade.

LegalVision’s employment lawyers can provide specialised help concerning employment law matters. Get in touch with LegalVision today on 1300 544 755 or contact us on this page.

COVID-19 Business Survey
LegalVision is conducting a survey on the impact of COVID-19 for businesses across Australia. The survey takes 2 minutes to complete and all responses are anonymous. We would appreciate your input. Take the survey now.

About LegalVision: LegalVision is a tech-driven, full-service commercial law firm that uses technology to deliver a faster, better quality and more cost-effective client experience.

The majority of our clients are LVConnect members. By becoming a member, you can stay ahead of legal issues while staying on top of costs. For just $199 per month, membership unlocks unlimited lawyer consultations, faster turnaround times, free legal templates and members-only discounts.

Learn more about LVConnect

Ayatalla Lewih
Need Legal Help? Get a Free Fixed-Fee Quote

If you would like to receive a free fixed-fee quote or get in touch with our team, fill out the form below.

  • By submitting this form, you agree to receive emails from LegalVision and can unsubscribe at any time. See our full Privacy Policy.
  • This field is for validation purposes and should be left unchanged.
Our Awards
  • 2019 Top 25 Startups - LinkedIn 2019 Top 25 Startups - LinkedIn
  • 2019 NewLaw Firm of the Year - Australian Law Awards 2019 NewLaw Firm of the Year - Australian Law Awards
  • 2020 Fastest Growing Law Firm - Financial Times APAC 500 2020 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 AFR Fast 100 List - Australian Financial Review 2020 AFR Fast 100 List - Australian Financial Review
  • 2020 Law Firm of the Year Finalist - Australasian Law Awards 2020 Law Firm of the Year Finalist - Australasian Law Awards
  • Most Innovative Law Firm - 2019 Australasian Lawyer 2019 Most Innovative Firm - Australasian Lawyer
Privacy Policy Snapshot

We collect and store information about you. Let us explain why we do this.

What information do you collect?

We collect a range of data about you, including your contact details, legal issues and data on how you use our website.

How do you collect information?

We collect information over the phone, by email and through our website.

What do you do with this information?

We store and use your information to deliver you better legal services. This mostly involves communicating with you, marketing to you and occasionally sharing your information with our partners.

How do I contact you?

You can always see what data you’ve stored with us.

Questions, comments or complaints? Reach out on 1300 544 755 or email us at info@legalvision.com.au

View Privacy Policy