I think that it is the norm to find a restraint of trade clause within an employment agreement.

The employer requires the restraint of trade in the agreement to safeguard him against a situation where an employee resigns from his employment, only to find that the employee is now working for his competitor.

The employee normally signs the agreement, not bothering to think about the consequences of such a clause, and only worrying about it when he/she is about to resign from his/her current employment.

A restraint of trade is, in short, a stipulation in the employment agreement stating that the employee, upon termination of the employment relationship for whatsoever reason, is prohibited from being involved in a business similar in nature to that of the employer.

Most clauses to this effect usually have an added clause stating the period of such restraint, calculated from date of termination of employment, and also the area of the restraint, such as 50 km from the office of the employer.

Now, for the purposes of this thread, let us assume that X ("the employee") is employed by Y ("the employer'). Before X was employed by Y, X had no or little experience in the field of, argument sake, automated business systems. X received training from Y, and X got promoted to sales manager within 3 years. X, in his position, received extensive training, inside knowledge of the working of Y, and had access to various databases such as clients, sales, mark-up, marketing strategies, etc.

X now receives an offer from Z ("the new employer") also as a sales manager, but with a better salary and benefits package. X accepts such offer and resigns from the employment of Y.

The restraint of trade clause, which was contained in the employment agreement between X and Y, stipulates that X is prohibited, for a period of 3 years, and within a radius of 50 km from the offices of Y, to be involved, either as employee or as consultant or as a member, director or partner in a business similar to that of Y.

Two (2) months after accepting the employment with Z, Y finds out that X is now employed by Z.

Can Y enforce the restraint of trade clause against X and maybe even Z?

Can X oppose the enforcement of the restraint clause?

Let the fun and games begin!!!