Treasury is seeking submissions on possible rule changes affecting non-solicitation clauses.

The employment contract clauses prevent a worker from enticing clients to do business with them after leaving a company.

Insurance brokers have previously told insuranceNEWS.com.au non-solicitation clauses are “imperative” and must not be touched.

But a government consultation paper says the clauses “restrict a client’s ability to freely choose a product or service from the provider they would prefer”.

While a full ban “may be too restrictive for businesses and may not provide the appropriate balance for employers and employees”, limits of three months may be appropriate, it says.

“A potential reform option could instead be to impose a duration limit on the use of client non-solicitation clauses from the date that the worker gives notice.

“Although a business does not have a right to dictate who a client could engage with, it may be unfair for a former employee to use the information and access obtained while employed to entice clients away before the business has any reasonable opportunity to attempt to maintain the customer’s patronage.

“This would justify at least a short period calibrated to provide a reasonable time for the business to take active steps to retain their clients while not preventing the former employee from starting a new business.”

The consultation paper asks: “Should the use of client non-solicitation clauses be restricted? If so, what sorts of restrictions are appropriate (e.g. duration, type of activity and scope of clients).”

It is also asks: “When, if ever, should it be legitimate for business to use co-worker non-solicitation clauses? If these clauses can be legitimate, what restrictions would be appropriate to impose on their use?”

Submit feedback here until September 5.