Judge Says Non-Compete Agreements Entered into Before Coming into Force of Section 67.2 of Employment Standards Act, 2000 Still Bind Employees

What is the effect of section 67.2 of the Ontario Employment Standards Act, 2000, which generally prohibits entering into non-compete agreements after October 25, 2021, on non-competition agreements entered into before October 25, 2021?

In Parekh et al v. Schecter et al, 2022 ONSC 302, Justice Mohan D. Sharma of the Ontario Superior Court of Justice held that the Working for Workers Act, 2021, S.O. 2021, c. 35, pursuant to which section 67.2 was enabled, does not apply retrospectivity- meaning that agreements entered into before the law’s coming into force remain in full force and effect.

Judge Orders Costs of Injunction against Solicitation “In the Cause”

The dirty secret of contract law is that a contract is only as good as a party’s ability to enforce it. Typically, this blog focuses on the legal ability of an employer to enforce certain elements of an employment contract; whether that element be termination provisions, about which I write frequently, or restrictive covenants, such as non-solicitation or non-competition agreements, about which I write much less frequently.

Putting legal considerations aside for a moment, there are also practical considerations in attempting to enforce contractual provisions, not the least of which is the element of cost.

In his reasons for decision in Accreditation Canada International v Guerra, 2016 ONSC 6184, the Honourable Justice Patrick Smith of the Ontario Superior Court of Justice sitting at Ottawa, highlights one of the main practical impediments to an employer attempting to enforce restrictive covenants: the cost.

Agreement “Not to Accept Business” Actually a Non-Competition Agreement: ONCA

When is a non-solicitation provision in an employment contract actually a non-competition agreement? The answer is, when it prevents the employee from “accepting business from” any former corporate accounts or customers.

In a short endorsement, Donaldson Travel Inc. v. Murphy, 2016 ONCA 649, the Court of Appeal for Ontario confirmed an earlier decision of the Honourable Justice David A. Broad of the Superior Court of Justice, dismissing the plaintiff employer’s claims for breach of contract, misappropriation of confidential information, inducing breach of contract and interference with contractual relations against its former employee travel agent and her new travel agency employer.

Tax Implications of Non-Competition Agreements

What are the tax implications of including a non-competition clause in an agreement for the sale of a business? Guest author Chad Saikaley, CPA, CA of the Ottawa accounting firm Ginsberg Gluzman Fage & Levitz, LLP , looks at those implications from an accountant’s perspective.

Non-Competition Clause and Injunctions: Beware What You Sign

Will the Ontario courts enforce a non-competition agreement and grant an injunction if the employee signs an agreement without legal advice? In one of the first cases released in 2014, the Ontario Superior Court of Justice has said yes.

Caveat Venditor - Non-Competition Agreements in Asset Sales

Can a five-year non-competition agreement be legally enforceable? If it is attached to the sale of a part of your business it can be, says the Supreme Court of Canada.

In the most recent of decisions from the highest court concerning non-competition agreements and restrictive covenants, Payette v. Guay inc., 2013 SCC 45, released September 12, 2013, the Supreme Court of Canada affirmed that non-competition agreements negotiated in the context of a sale are different from non-competition agreements included in a simple employment agreement.

Ambiguous Term May Invalidate Non-Competition Agreements

Is the term “United States of America” ambiguous? In a decision with serious potential ramifications for employment law, the Honourable Justice Ellen MacDonald has held that it is.

Like some other cases considered by this blog, TD General Insurance Co. v. Baughan, 2013 ONSC 333, is not strictly speaking an employment law case. The case concerned an Application brought by an automobile insurer, TD, for the court's declaration that the United States Virgin Islands is not part of the “United States of America.” In reply, the insured, Baughan, argued that the term “United States of America” is ambiguous.

The case is of relevance for those in the employment law world because it is not uncommon for a non-competition agreement to list the “United States of America” as a geographic area in which a former employee is prohibited from working. If the term is ambiguous, then arguably the term is unenforceable.

"If you liked it, then you shoulda put a ring on it:" What Beyonce can Teach Employers about Employment Law

What can employers learn from Beyonce’s hit song, “Single Ladies”? A surprising amount, I would suggest, when it comes to drafting non-competition clauses.

A decision from the Alberta Court of Queen’s Bench (equivalent to Ontario’s Superior Court of Justice), Enerflow Industries Inc. v Surefire Industries Ltd., 2013 ABQB 196 (CanLII), provides a solid overview of the enforceability of non-competition clauses and this blog will explain why sometimes it pays to "put a ring on it."

Non-Competition Agreement Can Increase Reasonable Notice Entitlement

Does the fact that an employee signed a non-competition agreement have any impact on the reasonable amount of notice of termination of employment to which that employee is entitled?

According to a recent decision from the Ontario Superior Court of Justice, the answer is yes.

Lack of Concrete Time Limit in Non-Competition Clause Unreasonable

The Court of Appeal for Ontario has ruled that a non-competition and non-solicitation agreement used by a construction company was unenforceable because the applicable time limit was not concrete.

In Martin v. ConCreate USL Limited Partnership, 2013 ONCA 72 (CanLII), released February 5, 2013 the Court of Appeal reversed an earlier Application decision, 2012 ONSC 1840, of the Honourable Justice Paul Perell, who had found the agreements enforceable.

ONCA puts Dent in Dentist's Business

How enforceable is a non-solicitation agreement in an Ontario employment contract? According to a decision released earlier today by the Court of Appeal for Ontario, Smilecorp Inc. v. Pesin, 2012 ONCA 853, sometimes the answer is “very enforceable.”

Wrongfully Dismissed Employee Not Bound by Non-Competition Agreement

For those looking for general information about Wrongful Dismissal under Ontario law, please click this link.

For most people who find themselves suddenly unemployed, the most pressing concern is the reestablishment of an income stream. The easiest way to do that is to find new employment. However, for some dismissed employees there is a challenge: their employment agreement with the dismissing employer contained a provision whereby they agreed not to work for a competing company.

The question raised, and answered by the Alberta Court of Appeal in Globex Foreign Exchange Corporation v. Kelcher, 2011 ABCA 240 (CanLII) is: Is a wrongfully dismissed employee still bound by the provisions of a non-competition agreement?

Social Media and the Rule against Solicitation

As someone who both practices employment law and blogs, tweets, whatever verb Facebook becomes, a question that is often put to me by persons contemplating moving to a new employer is whether that person is entitled to change the name of his or her employer on various social media sites.

The answer is more complicated than it would first appear; and, I would submit, also remains unanswered by Ontario courts. Nonetheless, below one will find the musings of this passive observer.

Blue Pencils Cannot be Used to Remove Date from Non-Competition Agreement

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“Blue-pencil severance” is an extraordinary remedy, by which a court will strike out certain words of a contract in order to give effect to the true meaning (if not the actual wording) of a contract. The concept is most familiar to employment lawyers from the Supreme Court’s 2009 decision in KRG Insurance Brokers (Western) Inc. v. Shafron, 2009 SCC 6.

In Veolia ES Industrial Services Inc. v. Brulé, 2012 ONCA 173, the Court of Appeal for Ontario ruled that it was not appropriate to employ blue-pencil severance to remove the start date from a non-competition contract.