What the Restraint of Trade Changes Could Mean for Your Business
You may have seen the recent announcement in the Federal Budget about banning restraint of trade clauses for employees earning under $175,000.
While this change won’t come into effect until at least 2027—and we’re yet to see the fine print—it raises important questions about how you protect your business interests.
In this short video, I break down what we know so far, what the courts typically enforce (and don’t), and how to ensure your agreements still stack up.
If you’ve got any questions about your current employee or business sale agreements, feel free to get in touch with me or anyone at Millens.
VIDEO TRANSCRIPT
Ross Millen:
You probably saw in the recent Australian budget there was an announcement that the government is going to ban restraint of trade agreements with employees earning less than $175,000 a year. Now, I'm not sure what the budget implications or the pressure for that was, but it's not going to happen until at least 2027, and we've got to see what any actual legislation says. But I do find it very curious because in most cases the courts are very reluctant to enforce these sort of restraints on employees. Sure, you can't leave and take confidential information; sometimes you can't contact people who were the clients of the business you left, but it's very, very hard, actually, probably impossible, to stop someone working their job. If you are a real estate agent, you go to another real estate agency, it's very hard to stop you actually being a real estate agent or a lawyer or some other profession.
But what they do prevent you is taking trade secrets or confidential information or documents or pricing or any know-how like that, and I assume that's not going to be restricted. Now, we've got a lot of experience in drafting restraint agreements, both through employees and also when you're selling a business or you've got a shareholders' agreement. We make sure that they're enforceable, they're not too strict, and they've got all the legal requirements. So if you've got any queries about restraint of trade clauses, restraint of trade agreements, what you can do with your employees, or if you are an employee, what you can do? Remember to contact me or anyone else at Millens. We're here to help
