Restraint of Trade Clauses in Employment Contracts

In choosing a designer, you have to think if you want to work side by side, or you can work from a distance and communicate via phone. Some factors you need to consider in hiring a website designer are the following:

Do they ask you a lot of questions about your business? They should be interested to know more about your business. Since they will design a website that represents your brand, they should spend time to know it better.

Visit the sites they have created to know if they are your type of designs. Do all of them have a particular feel, or they are also flexible when it comes to their designs?

Ask them if they did everything, from the programming to the actual layout and graphic work.

If they do not do graphic work, ask if they can to refer you to a graphic artist.

Do they follow a process that is planned well and which brings you all throughout the design phase? Will they keep a record of the things that were discussed and decided on?

Are they familiar with SEO and Internet Marketing? Make sure that the site they are creating will be able to meet your bigger business and marketing needs. (A visually appealing website is useless if it does not generate income).

Ask about the designer's fees, including the estimated price of the site they will create. However, you first have to discuss the features and content that you like for them to be able to provide a good estimate. Certainly, it would cost more to include autoresponders, a blog, email address setup, logo design, membership site, newsletter, SEO or shopping cart (or if you have several web pages).

Ask about billing. Do you have to give a deposit? Will they give you an invoice every month or when reaching certain milestones?

Check if they will stay within your budget, or if they will suggest add-ons that will increase the price of your website. Always keep in mind that you are responsible for your budget and not the designers.

Visit some of their past and present clients and ask about the process. You want to hire somebody with good communication and project management skills. They should pay attention to what you like and not just give advice. Also, they should communicate with you in a well timed manner via emails and phone calls.

Will they continue to maintain your site even after creating it and how much will it cost? There are designers that only want to create websites, but do not maintain them. If you want to maintain it for a lower price, you can hire a virtual assistant or VA to do the job, provided that he/she has website programming skills. Know the types of programming used in your site. This way, it would be easier to find someone to update it.

Under UK law an employee has a duty of fidelity to his employer while working for them. This duty is implied in the contract of employment. The question often arises as to whether an employer can enforce contractual obligations on the employee after the expiration of the employment contract. In certain situations, the answer is yes. One tool that can be used to achieve this is a restraint of trade clause.
The restraint of trade clause is a contractual term that expressly restricts an employee’s freedom to work, once the current employment relationship ceases. Such a clause will only be upheld by the Courts, if it is reasonable as between the parties and where it is consistent with the interests of the public. The pubic interest is that society should not be deprived of the services of a skilled workforce. The question of what is reasonable is considered on a case by case basis. In practice, the clause must go no further than is reasonable for the protection of the employer’s business.
Restraint of trade clauses usually contain restrictions on the employee’s ability to work in a geographical area, or for a defined length of time. It is not uncommon or illegal for an employer to restrict a former employee from working within a fixed geographical area, or from working with a rival business to the former employer for a period of time after the cessation of the contract of employment. However, the restrictions must not be excessive. What is excessive depends on the nature of the work in question and the structure of the business.
Decided cases in the United Kingdom have upheld restraint of trade clauses that prevent a former employee working with a rival business and from canvassing former clients of the employer for a period of twelve months post contract.
Courts have also declared unreasonable and void restraint clauses that prevent a person from doing business within a 25 mile radius of London.
A clause that purports to cover a worldwide restriction is unlikely to be upheld. The narrower and more specialist the market in question, the more likely the clause is to be upheld.
It is more likely that a Court will uphold a clause as reasonable where it prevents the former employee from soliciting former clients, or from disclosing company secrets rather than stopping the former employee from working at all. Clearly a restraint clause which prevents a former employee from taking up a business which doesn’t compete with the former employer is unlawful.
Where a restraint of trade clause is capable of several interpretations, some of which are considered reasonable, some of which are unreasonable, judges can sever the offending parts and enforce the remainder.
Where a former employee breaches a restraint of trade clause, he is guilty of breach of contract. Such a breach gives rise to an action on behalf of the former employer for damages. It is difficult to assess the level of damages, some Courts measure damages at the level of the employee’s gain rather than the employer’s loss.
A useful way for a former employer to prevent a former employee from breaching the terms of a restraint clause in an employment contract, is to seek an interlocutory injunction restraining the breach. In an application for injunctive relief the Court will have regard to whether there is a serious issue to be tried and will grant the injunction if it is of the view that the balance of convenience lies on the side of the employer. In UK decisions, other factors such as the likelihood of trade secrets being disclosed to third parties have been considered in granting the relief.
However, if the practical effect of enforcing the injunction is to compel the employee to continue working for the employer, the injunction for specific performance of the employment contract will not be granted.
The question of the enforceability of restraint of trade clauses is a fertile ground for litigation, both for employers and employees and can play a significant role in the formation of the contract of employment.