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I live in Victoria, Australia. When signing a contract for software development industries, the employers tend to write the contract agreement conditions too broad to protect their IPs. When searching online, all contents I find are for protection of the companies than the rights of the employees. I believe, even if a contract applies a condition that is against employee's right, they will not be enforceable through law. Please correct me if I am wrong. My concerns are about how much companies can take over their employee's future work after termination of their contract?

  1. Can a contract prevent the employee to join another company using similar technologies after contract termination?

  2. Can a contract broadly take over book/publication of the employee after contract termination within a period?

  3. Can a contract prevent an employee to found their own company after the contract termination?

  4. Can a contract take over general skill of the employee after contract termination?

  5. Can a contract go after employee's work for another company or a company founded by the employee after the termination of the contract?

  6. Can a contract take over intellectual property that is out of scope of the company during the employment? For example a automotive software company run after your dancing youtube video that creates a good money.

If there are laws to prevent such abuses by the employment contracts please address them (Addressing each item separately is highly appreciated).

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  1. Can a contract prevent the employee to join another company using similar technologies after contract termination?

Yes. This is referred to as a restraint of trade clause.

For the restraint clause to be enforceable, it needs to be “reasonably necessary” in the circumstances to protect the “legitimate business interests” of the employer.

The nature of the employment relationship and the geographic and temporal scope are all factors in this. Generally, the employee must have some ‘secret’ knowledge - client lists, IP, business plans etc. and the geographic and time restrictions need to be as short as possible to protect the legitimate business interests. A restraint of trade clause on an auto-mechanic is unlikely to be enforceable, one on an ASX 200 company CEO almost certainly is.

  1. Can a contract broadly take over book/publication of the employee after contract termination within a period?

Unless otherwise agreed, everything an employee produces in the course of their employment belongs to their employer. This is the essence of an employment contract - the employee gets paid, the employer gets the production. It doesn’t matter if what’s produced is a good, like a table, a service, like a haircut, or IP like a literary work or a client relationship.

What they produce outside the employment - before, after, or not in the course of it - does not belong to the employer.

If someone publishes a book using someone else’s IP then the owner can take various actions including an account of profits and an injunction to stop. Just like if the table-maker was selling the employer’s tables or the hairdresser was pocketing the client’s fee, you can’t take things that don’t belong to you.

  1. Can a contract prevent an employee to found their own company after the contract termination?

Yes. See point 1.

  1. Can a contract take over general skill of the employee after contract termination?

No.

Skills, even highly specialised skills, belong to the employee even if acquired at the cost of the employer. Similarly, for general knowledge.

Trade secrets are different, things like a client list, KFC’s 11 herbs and spices etc. can’t be used by an ex-employee.

  1. Can a contract go after employee's work for another company or a company founded by the employee after the termination of the contract?

Generally not. The employment contract binds the employer and the employee and due to the doctrine of private it cannot affect the rights and obligations of third-parties. If the ex-employee has breached their contract, the employer’s beef is with them, not anyone else.

However, if the third-party has breached IP law, e.g. by using patented information supplied by the ex-employee, then they can be sued for that.

  1. Can a contract take over intellectual property that is out of scope of the company during the employment? For example a automotive software company run after your dancing youtube video that creates a good money.

No. As stated in point 3., your employer owns what you produce “in the course of your employment.”

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