Understanding Restraint of Trade Clauses: A Guide for Allied Health Clinicians

Disclaimer: This blog provides general information and opinion only and is not personal legal advice. It is intended for educational purposes and may not cover all circumstances. Clinicians should seek independent professional or legal advice for specific contract or employment matters.

Transitioning to a new role or starting an independent practice can be exciting, but it often comes with contractual considerations, including restraint of trade clauses. These clauses are common in healthcare contracts and can feel confusing or restrictive. This guide breaks down what they are, how they work, and best practices for navigating them ethically and professionally.

Restraint of trade clauses are relatively common in employment and contractor agreements, particularly in healthcare and allied health settings, but they are rarely enforced in practice. Most companies include these clauses as a precaution to protect business interests, yet legal action is uncommon. Courts are often reluctant to uphold restraints that limit a clinician's ability to work, especially in sectors with high demand and limited supply of skilled professionals.

Despite their limited enforceability, ethical considerations remain important. Clinicians should approach transitions with transparency, informing clients professionally and respectfully about their departure.

What Are Restraint of Trade Clauses?

Restraint of trade clauses are designed to limit your ability to work in a similar role or location after leaving a position. They often include:

• Restraint Period: The timeframe you are restricted from certain activities (commonly 12 months)
• Restricted Area: A geographical boundary, such as within 50 km of your former workplace
• Restricted Activities: Limitations on performing similar services or roles

Common Clauses and Their Implications

• Client Solicitation: Prevents you from directly encouraging clients to leave the company. If clients independently choose to continue services with you, this is not considered solicitation.
• Service Restrictions: Some clauses state you cannot provide services to the company's clients for a set period. In healthcare, these clauses are rarely enforceable, as clients have autonomy over their care.
• Non-Poaching of Staff: Restricts hiring current employees or contractors. Posting job ads and allowing staff to apply voluntarily is generally permitted.

Best Practices for Transitioning

When leaving a role or moving into independent practice, clinicians should approach the transition thoughtfully and ethically. Maintain professionalism, use neutral language when discussing your next steps, and ensure continuity of care.

Disclaimer: This blog provides general information and opinion only and is not personal legal advice.