A restraint of trade agreement is a legal document that is often used in business to protect confidential information and limit the actions of employees once they leave the company. The purpose of a restraint of trade agreement is to prevent employees from using the information, knowledge, and skills they have gained while working for a company to compete against that same company after they leave.

This type of agreement is most commonly used in professions where employees have access to sensitive information such as trade secrets, client lists, and product development plans. By signing a restraint of trade agreement, employees agree to certain restrictions that limit their ability to work for competitors, solicit clients, or even start their own businesses within a certain geographic area or time frame.

From an employer`s perspective, a restraint of trade agreement can be an essential tool to protect their business interests. It can prevent an employee from sharing confidential information with a competitor that could lead to a loss of business or market advantage. It can also prevent employees from using their former employer`s intellectual property to start a competing business.

From an employee`s perspective, a restraint of trade agreement can limit their career growth and earning potential in the industry. It can also restrict their ability to use the knowledge and skills they have acquired during their time with the company to advance their career or start their own business.

However, not all restraint of trade agreements are enforceable. Courts will often scrutinize these types of agreements to ensure they are reasonable and fair. In general, a restraint of trade agreement must be designed to protect legitimate business interests, be narrowly tailored in scope and duration, and not be overly burdensome on the employee.

In conclusion, the purpose of a restraint of trade agreement is to protect an employer`s business interests and confidential information while also limiting an employee`s ability to harm the employer through unfair competition after they leave. However, it is important for both parties to carefully review and negotiate the terms of the agreement to ensure it is fair and enforceable.