My employment agreement has a “No competition” clause which states that within 12 months after my employment ends, I must not practice within an area less than 10km of the training practice. Are these types of clauses legally enforceable?
The NTCER outlines your minimum employment terms and conditions
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A Restrictive Covenenant clause should not be included in a registrar employment agreement, and a Non-Solicitation clause is recommended. See Clause 17 of the National Terms and Conditions for the Employment of Registrars (NTCER).
Explanation:
The use of Restrictive Covenants in Australia is becoming less prevalent. Courts generally only enforce them if they are found necessary to protect the business goodwill of the party that benefits from the clause.
GPSA and GPRA believe that it is unlikely that a GP registrar would have the necessary influence after a 6 or 12 month term to negatively impact a practice if they move to a competitor in close proximity.
A more common scenario across all industries, and one which GPSA and GPRA agree should not be encouraged in general practice, is where a former employee attempts to solicit clients (patients) and/or staff to follow them to another business. For this reason, the Restrictive Covenant in the previous version of the NTCER has been replaced with a Non-Solicitation clause, reflecting the reality of the current business environment and the mood of the courts in upholding restrictive covenants (see NTCER clause 17).
