Cascading Clauses example:

This is an example for a restraint of trade placed in an employment contract – NOTE: not everything
in this will be reasonable and required for the sale of a business. Please think critically if adapting.
This is adapted from the case of Hanna v OAMPS Insurance Brokers Ltd [2010] NSWCA 267, and is
known as a 3x3 cascade as it provides 3 time periods and 3 geographical periods. This is typically
acceptable as a reasonable form of cascading clauses. Note that the time periods and ways that
distance is measured will differ depending on the nature of the business. Ie, if the reputation is clear in
multiple cities it can be presented with those towns mentioned, or by a surrounding distance –
whatever appears reasonable. But also consider that a reputation for an online only store will be
harder to accurately capture.

1. RESTRAINT OF TRADE

1.1 To reasonably protect the goodwill and the legitimate business interests, during the
Restraint Period and within the Restraint Area you will not entice or solicit employees,
contractors or suppliers whom you have had dealings with during your employment.

1.2 Restraint Period means, from the date of termination of your employment:

a.) 5 months;

b.) 13 months; and

c.) 12 months.

1.3 Restraint Area means:

a.) Australia;

b.) The State or Territory in which you are employed at the date of termination of your
employment; and

c.) The metropolitan area of the capital city in which you are employed at the date of
termination of your employment.

1.4 The covenants given by you in this clause will apply, and may be enforced against you,
regardless of the reason(s) for the termination of your employment.

1.5 Each restraint contained in this Deed (resulting from any combination of the wording in
clauses 1.1 and 1.2) constitutes a separate and independent provision, severable from
the other restraints. If a court of competent jurisdiction finally decides any such restraint
to be unenforceable or whole or in part, the enforceability of the remainder of that
restraint and any other restraint will not be affected.