Restraint of Trade

The Dom Post reports on how Masterton Pak ‘N Save has put restraint of trade clauses in its employment contracts with shop assistants.

This is pretty bizarre and probably not enforceable. Restraint of trade clauses are intended to protect employers from senior or specialist staff suddenly walking out the door and setting up a competitor, or going to a competitor, with all their intellectual property, clients, contact lists etc. They are about key staff who might actually attract business away from their former employer.

Now it is hard to imagine how a shop assistant moving jobs could result in customers deciding to shop elsewhere – just so they can still be served by that shop assistant.  I mean maybe if they were super-hot 🙂

I suspect the supermarket is just worried about a competitor setting up nearby and offering higher wages. Restraint of trade clauses are not meant to be just about protecting yourself from the market.

I tend to agree with Laila Harre that the clause is “completely unreasonable and illegal”. Two legal experts also doubt it is enforceable, and Foodstuffs head office have pointed out they don’t think it is enforceable and has only been used in Masterton by the local franchise owner.