I joined a compnay in th financial services industry in January of this year. I signed a 3 year restraint of trade and received a upfront lumpsum payment of R135 000. I have recently realised that it would be more beneficial for me to be self employed in the financial services industry. I have not provided to new employer with many clients and have no intention of taken any clients from him. Can I resign and repay the R135 000 to the employer and work for myself without any legal consequences?
Province: Cape Town
Just a decision that I am contemplating.
Hi There - restraints of trade are technical areas of law and should not be approached lightly. The main principle behind a restraint of trade is whether same is REASONABLE. If the restraint is reasonable it will be valid and enforceable. What constitutes a reasonable restraint is very difficult to answer and will depend to a great degree on the terms and conditions of the restraint you signed. The fact that you were paid in advance for the restraint does contribute to its reasonableness but it doesn't automatically mean it will be enforceable by the company. If you are staying in the industry but not competing with your company then there shouldn't be any basis for them to restrain. Can I please make a suggestion that before you make any decisions that you go and see a properly qualified and experienced attorney who will read your employment contract and the restraint of trade carefully and advise you whether you are likely to be held to the restraint. You may find that you can get out of the restraint and keep the money so don't be too quick to just give it back. I hope this helps and if you need further info please let me know. Please also remember to rate my answer or I don't get paid. Regards
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