QUESTION: My new employer wants me to sign an employment contract before I start working.
It includes a non-compete clause that would apply to me for 5 years after I leave this employer and would cover me so long as I am working anywhere in Canada and the U.S.
Is this something I should be concerned about?
ANSWER: Canadian courts will uphold non-compete clauses, which are also referred to as restrictive covenants, if they are reasonable and not over-reaching.
Our courts will closely examine the wording of these clauses to make sure that in the context of the particular industry concerned, the geographical scope and applicable time period are not unreasonable.
If they are, the court is unlikely to enforce this kind of clause and will simply strike it down. The court will not replace it with something that might be more reasonable: the clause is either good and upheld or bad and struck down.
If you are an employer and you would like your employment contracts to protect your business interests after an employee leaves, we can help you draft an enforceable non-compete clause.
If you are a former employee who is being threatened by your former employer because you have taken up a similar job in breach of a non-compete clause, we can tell you if the clause is likely to be upheld or not so that you may make an informed decision about what you should do next.
If you are a new hire who needs advice about the wording of a non-compete clause that your employer wants you to agree to, we can help. Contact us.
