Restrictive Covenant Lawyers in Western Canada
If a Canadian employer wants to prevent a former employee from using proprietary interests when they leave (to solicit clients/colleagues or compete directly), restrictive covenants may be inserted into employment contracts.
These legally binding covenants come in several forms, most commonly “non-competition” or “non-solicitation” clauses.
New employees are requested to sign these clauses upon agreeing to join the company. They are also often required for promotions or termination agreements.
Reach out to our employment lawyers to find out what you need to know as an employee or employer in Western Canada.
What are restrictive covenant clauses in employment law?
Restrictive covenant clauses are essentially formal trade restraints placed on an employee after they leave, to protect the legitimate business interests of the employer.
It is legal for employers across Canada to protect their interests by requesting that employees sign restrictive covenant clauses.
If legally binding, a court can enforce them. However, depending on their form, non-competition and non-solicitation clauses may run into difficulties.
Restrictive covenants can only be enforced by the court if they meet two basic requirements:
- The least intrusive means are used to protect the interests of the employer
- The clause is clear and reasonable in its scope of restriction
Employers frequently make mistakes when drafting restrictive covenants, meaning that if they are challenged in court, they may not hold up to scrutiny.
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