Things to consider before you sign an employment contract #1 Restraint of Trade

Restraint of trade clauses in employment contracts for dentists in NZ can be quite specific and are subject to legal scrutiny. Here are some key points to consider:

1. Purpose: These clauses aim to protect a dental practice’s legitimate interests, such as client relationships, confidential information, and investment in staff training.
2. Reasonableness: For a restraint to be enforceable, it must be reasonable in terms of duration, geographic scope, and the activities it restricts. Courts generally assess whether the clause is necessary to protect the employer's interests without unduly restricting the employee's ability to work.
3. Duration and Scope: A typical restraint might last from six months to two years, but it should be tailored to the specific circumstances of the practice. Geographic limitations should also be reasonable, often confined to areas where the dentist has worked or has built significant client relationships.
4. Legal Precedents: New Zealand case law emphasises balancing the interests of the employer and the employee. Courts often look at the specifics of each case when determining enforceability.
5. Negotiation: Dentists should carefully review and negotiate these clauses before signing. Legal advice can be beneficial to ensure that the terms are fair and reasonable.
6. Alternatives: In some cases, it may be possible to negotiate alternative arrangements, such as compensation during the restraint period or shorter durations.

If you're considering an employment contract or are currently bound by a restraint clause, it makes sense to consult with a legal professional who specialises in NZ employment law for advice specific to your circumstances.