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Riley, Joellen --- "Commodifying Sheer Talent: Perverse Developments in the Law’s Enforcement of Restrictive Covenants" [2009] ELECD 445; in Arup, Christopher; van Caenegem, William (eds), "Intellectual Property Policy Reform" (Edward Elgar Publishing, 2009)

Book Title: Intellectual Property Policy Reform

Editor(s): Arup, Christopher; van Caenegem, William

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781848441637

Section: Chapter 13

Section Title: Commodifying Sheer Talent: Perverse Developments in the Law’s Enforcement of Restrictive Covenants

Author(s): Riley, Joellen

Number of pages: 18

Extract:

13. Commodifying sheer talent: perverse
developments in the law's
enforcement of restrictive covenants
Joellen Riley

I. INTRODUCTION
Earlier chapters in this book have examined ways in which law creates and
protects certain intellectual property rights, with a view to proposing law
reform that would promote innovation. This chapter shares the concern that
law should support (and certainly not suppress) human ingenuity and thereby
foster economic growth and development, in the broad interest of public
welfare. The focus in this chapter, however, is not traditional `intellectual
property' law but the law of contract. More particularly, the concern here is
with law relating to restrictive covenants in employment and service contracts.
The claim in this chapter is not that the law itself needs to be reformed, but
that the practice of law should return to the doctrinal purity of the past.
This chapter argues that the law concerning the enforceability of restrictive
covenants in employment contracts has slipped into serious error. In Australia at
least, the enforcement of restrictive covenants is a matter of private contract law,
so disputes are dealt with by the ordinary courts, exercising common law juris-
diction. Restrictive covenants in services and employment contracts are
expressly excluded from federal competition laws in Part IV of the Trade
Practices Act 1974 (Cth) by s. 51(2). There are only limited opportunities for
review of contracts on the basis that they contain `unfair terms' in Australia1 so
that, by and large, arguments over the enforcement of restrictive covenants are
...