Leaving a job does not always end the employer’s influence over what happens next. An employment contract may contain restrictions that appear to prevent the employee from joining a competitor, approaching former clients, hiring former colleagues, or establishing a competing business.

These clauses are receiving fresh attention in 2026 because the Australian Government has released draft legislation proposing major restrictions on non-compete clauses. However, the proposed reforms do not mean that every existing restraint has disappeared or that employees can safely ignore the wording in their contracts.

Job seekers need to understand what they have signed, what the reforms may change, and which restrictions could continue to matter after they leave.

What Is a Non-Compete Clause

A non-compete clause attempts to prevent an employee from working for a competing business or operating a competing enterprise for a particular period after employment ends. The restriction may also define a geographic area in which the employee cannot compete.

Some contracts use cascading restraints. They may list several possible time periods and geographic areas, allowing a court to consider a narrower restriction if the broadest version cannot be enforced.

Non-compete clauses are different from confidentiality obligations. An employee may be free to join a competitor while remaining prohibited from using or disclosing confidential information belonging to the former employer.

They also differ from non-solicitation clauses, which may restrict the former employee from approaching particular clients, customers, suppliers, or employees. Separating these clauses is important because a reform directed at non-competes may not automatically remove every other post-employment restriction.

What the Government Has Proposed

In September 2026, the Australian Government released draft legislation on non-compete restraints. The proposal would ban non-compete clauses for employees earning below the Fair Work high-income threshold, which is currently stated as $190,100 per year.

The reforms are intended to make it easier for workers to move between jobs, pursue better pay, and use their skills productively. The government has also proposed action against wage-fixing and no-poach arrangements between businesses.

However, draft legislation is not the same as an operative law. The wording may change before it is passed, and commencement rules will determine when the reforms begin and which agreements they affect.

Employees should therefore avoid assuming that a non-compete clause is already void simply because a ban has been announced.

Restraints Can Cover More Than Competitors

A contract may contain several obligations that affect an employee after departure. One clause may restrict employment with a competitor, while another prohibits contact with clients the employee dealt with during a defined period.

A confidentiality clause may continue indefinitely for genuine confidential information. Intellectual property provisions may also determine who owns material created during employment.

The practical effect depends on the wording, the employee’s position, the employer’s legitimate business interests, and the surrounding circumstances. Senior executives with access to sensitive strategy may face different risks from junior employees who have limited access to confidential information or client relationships.

What Candidates Should Check Before Signing

Candidates should read the restraint section before accepting an offer, rather than waiting until they want to resign. They should identify the restricted activities, duration, geographic area, affected competitors, and categories of clients or employees covered.

If the clause appears wider than necessary, the candidate can request clarification or negotiate narrower wording. For example, a broad restriction covering an entire industry may be replaced with a targeted obligation concerning specific clients or confidential information.

Job seekers exploring roles through My Aus Job should compare the proposed restriction with the realities of their occupation. A clause that prevents someone from working across most of their specialist field deserves careful attention, even when the salary and position look attractive.

What to Do Before Joining Another Employer

An employee considering a competing offer should review the signed contract and any later variations. They should not rely on their memory of what the agreement contained or assume the employer will ignore the restraint.

The new employer should also receive accurate information about any relevant restriction. Hiding the issue can create complications if the former employer sends a legal demand after the employee has started the new role.

Where the language is broad, the position is senior, or the former employer has threatened enforcement, the employee should obtain advice based on the specific contract. Online summaries can explain the general direction of reform, but they cannot determine whether a particular restraint is enforceable.

Final Thoughts

The proposed 2026 reforms could significantly reduce the use of non-compete clauses for low- and middle-income Australian workers. Until the final legislation takes effect, however, employees should continue treating contractual restraints seriously.

The safest approach is to understand the restriction before accepting the job and review it again before leaving. Career mobility should not depend on discovering an important clause after the next offer has already been signed.

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