Non-Compete Clause Lawyers in Calgary

Non-compete clauses fall 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.

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

The enforceability of restrictive covenants can vary across Canada and can also vary depending 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 for the protection of 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. Where a non-solicitation clause provides adequate protection, a non-compete clause will be unenforceable because it is overly restrictive.

Yes, 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 covenants contained in the employment agreement.