Non-Compete Agreement Lawyers in Calgary

A non-compete clause falls under the broader term “Restrictive Covenants”, which encompass non-competition and non-solicitation clauses often included in an employment agreement. These clauses are typically triggered against an employee when the employment relationship ends and require the employee to continue the duty of good faith and loyalty, beyond the term of the employment relationship.

Non-compete clauses prohibit former employees from taking a new position with a competing business. This is to avoid the risk that an employee may begin working with a competitor and use an advantage gained by working with their previous employer such as trade secrets, client lists, marketing strategies, etc.

A non-compete clause is a specific section in an employment contract that prevents an employee from working for competitors after leaving a job. A non-compete agreement is a broader contract that may include multiple restrictive clauses, such as non-solicitation or confidentiality agreements.

Non-solicitation clauses are less restrictive than non-compete clauses. An employee subject to a non-solicitation clause can generally work for a competitor, however they will be prohibited from contacting their former clients once they have started working for a competitor.

The enforceability of restrictive covenants varies across Canada and can depend on the industry and nature of the business.

Generally, the law attempts to balance the public interest in maintaining freedom of trade against reasonable limits on trade to protect private business interests. For that reason, any contract restricting commercial activity, including a non-compete or non-solicitation clause, is difficult to enforce.

To be enforceable, non-compete and non-solicitation clauses must be:

• Reasonably necessary to protect the employer’s legitimate business interests
• Clear and unambiguous
• Limited to a reasonable geographic scope and duration of time
• Reasonable in the activities it prohibits the employee from engaging in

For example, the courts will not enforce a non-compete clause if a non-solicitation clause would adequately protect the employer’s interests. In this situation, a non-compete clause will be unenforceable because it is overly restrictive.

If an employer unlawfully terminates an employment relationship, it’s possible the employer may not be able to enforce a non-compete or non-solicitation clause. This includes a case where an employee has been constructively dismissed, meaning the employer has unilaterally changed the fundamentals of the employment contract.

In the case where an employer has validly terminated an employee for just cause, it’s more likely the employee will have to follow any restrictive clauses contained in the employment agreement.