2. Employment practices and restraint of trade clauses

Ronald is a skilled coffee roaster but needs to employ at least two roasters so that he can develop and operate the business. He is very worried that he will pass on his knowledge and experience to his staff, who may then go and work for a competitor and share the coffee roasting secrets he learned in England. He did some online research on how to protect his business from such risks and identified as a potential solution a restraint of trade clause in employee contracts.

Ronald drafted the following clause for the contracts of all coffee roasters based on his internet research:

‘Upon the end of this agreement the employee agrees to not work in any capacity for any other coffee related business in Australia for a period of ten years.’

In Part C.2 of your report you must advise Ronald on the following matters:

Describe the commercial purpose of a restraint of trade clause.
Advise Ronald whether his proposed restraint of trade clause is enforceable. Your answer must be supported by common law of contract legal principles and cases. Do not discuss statute law.
Propose to Ronald a new restraint of trade clause that is likely to meet the requirements of the common law restraint of trade doctrine.

400 words.