Upholding Restraint of Trade (ROT) Clauses

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The control on restraint of trade (ROT) clauses is designed to protect employees from vindictive employers, and courts tend to keep that in mind when hearing disputes. The question of upholding the ROT clauses in favour of the employee or employer by the courts would largely depend on the facts presented in the each case and the determination of the reasonability of ROT that would be covered in this paper. The extent to which restraint of trade clauses are legally allowed varies per jurisdiction. Some jurisdictions, such as the state of California in the US, invalidate non-compete-clauses for all but equity stakeholders in businesses. For the purpose of this comparative study, we will be using Singapore and California to illustrate the differences in the applicability of ROT and the different outcomes that would arise out of a case study, applying the different labour law on ROT restrictions in these two countries. 2. Applicability of ROT Singapore The law regarding restraint of trade clauses in Singapore has been originated from the case law where it helps in providing guidance on the effectiveness of such clauses. Non-compete clauses during the period of the employment and beyond, the preservation of confidentiality clauses as well as non-solicitation clauses are types of express restraint of trade clauses that are commonly found in employment contracts in Singapore. However, the existence of such clauses do not automatically imply that the courts in Singapore will

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