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.

Termination Provisions in Contract Unenforceable Without Continuation of Benefits

In a decision released in October 2011, Stevens v. Sifton Properties Ltd., 2012 ONSC 5508 (CanLII), the Honourable Justice Ian F. Leach held that where an employment contract failed to provide for the continuation of benefits throughout the applicable notice period - even though the employer actually maintained the benefits throughout the notice period - the contractual provision was of no force or effect.

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.

Poorly Drafted Employment Agreement Proves Costly

If a termination provision in an employment agreement does not technically violate the provisions of the Employment Standards Act at the time of termination, but has the potential to do so at other times, is it still enforceable? “No” says the Ontario Superior Court of Justice.

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?

Successor Co. Severance Policies

A frequent occurrence in what some once called “Silicon Valley North” is the overtaking of one company whose fortunes have changed (let’s say Nortel) by another.  For some employees the change is minor as they are fortunate enough to be hired on by these successor companies.  That is, however, until they are fired by these new companies.  As some employees of these new ‘grey knights’ are discovering not everything is necessarily the same as it was.

Some of these successor companies have attempted to insert “severance policies” into their employment agreements.  A frequently asked question I receive is whether or not these severance policies are enforceable.

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.