This article interrogates the extent to which a Restraint of Trade Clause (RTC) in an employment agreement will be considered enforceable or otherwise by the courts. It adopts the doctrinal method, relying on primary and secondary sources of data which were subjected to content analysis. The article takes a cursory look as to possible reasons why an employer would include a RTC in a contract of employment. The issues arising therefrom are: what legal criteria do courts use to determine if a RTC is reasonable in terms of duration, geographical scope, and activity? Under what circumstances will a court deem a RTC unenforceable? How do courts differentiate between protecting legitimate proprietary interests and simply stifling competition? Do the courts have to strictly follow the provisions of the Federal Competition and Consumer Protection Act (FCCPA), 2018 in determining the reasonability of duration in a RTC? These issues form the basis of this article. This article finds that some sensitive positions, some of which may afford an employee’s access to his employer’s trade secrets and confidential information, a disclosure of which may put the employers’ competitors into some advantage or otherwise negatively impact or jeopardise the employer’s business interests need to be secured. It concludes that, while restraint of trade clauses aid in safeguarding an employer’s interests, the position held by the courts will be dependent on the context of the facts of a given case. This article recommends that while the FCCPA, 2018 suggests a restrictive period to not be more than two (2) years for the operative duration of a RTC, the courts should assess any duration based on the peculiarity and nature of an employer’s business in ascertaining the reasonableness or otherwise of a restraint clause
Oluwatobiloba Ifedolapo Ajayi (Tue,) studied this question.