THIS WEEK’S ARTICLES
Issue 9 1 Apr 2021
New MP Helen White seeks revamp of restraints of trade p1
Aussie court sheds light on unconscionable conduct p5
Are lockdowns the tool of lazy and authoritarian govts? Pages 8-9
LawNews adls.org.nz
COMPETITION/EMPLOYMENT LAW
New MP seeks rethink on restraints of trade By Diana Clement
Former employment lawyerturned-MP Helen White is preparing a bill to reform restraints of trade law, saying it is long overdue in the employment jurisdiction. White, who entered Parliament last year on the Labour Party list, told a recent New Zealand Employment Law conference that while she had alluded to a private member’s bill in her maiden speech to Parliament, she now intends to lobby to get her bill on the government’s policy agenda. In her view, restraint of trade (RoT) clauses in employment contracts have the effect of keeping workers poor by limiting their options to change employers or start businesses. This can also stifle innovation, White says.
Likewise, in employment law, RoTs often find their way into the contracts of key employees who might have access to intellectual property considered critical to their employer’s business, such as trade connections and secrets. As well as walking out the door and taking valuable knowhow to the opposition, RoT clauses are designed to stop employees poaching customers, suppliers or fellow staff when they move jobs or set up on their own. They must be balanced against the employee’s right to earn a living and are upheld by the courts if they are found to be reasonable. Speaking at an ADLS CPD seminar last month, barrister Deirdre Watson said RoT clauses are a useful commercial device whereby employers, franchisors, shareholders and businesses generally Continued on page 2
Photo by Hagen Hopkins / Stringer / Getty Images
RoT clauses are common in the sale and purchase of businesses and are designed to protect the vendor from competing directly with the purchaser within a specific geographic limit and for a specific time.
Restraints of trade crimp the rights of low-paid workers
Connecting restraints of trade with the gap between rich and poor is something that [unions] have to grapple with. You are catching the very people who you want to be free to move up in wages – your low-paid workers