Employment contracts often include restrictions on employees after they have departed employment. These terms are designed to favour the employer upon an employee’s departure, regardless of the reason(s) surrounding the release.

Sometimes these clauses are drafted in a way that is vague, unreasonable, or seeks to overreach, which usually results in such terms being struck down or held unenforceable in court.

Restrictive Covenants

Lawyers often refer to restrictions placed on a departing executive or employee’s ability to work elsewhere in terms of “restrictive covenants”: restrictions imposed on a departing employee through their existing contract of employment.

There are several key types of restrictive covenants or contractual obligations imposed on departing employees:

Non-Compete Clauses

Non-competition or non-compete clauses and provisions are terms in a contract designed to restrict a departing employee from going to work for a competitor or starting up a rival business.

Over the years, the courts have taken a narrow approach and made it very difficult for employers to enforce these provisions by imposing a strict policy for interpreting the scope, geographic restrictions, and the duration of such provisions. The courts have been concerned, quite rightly, about restricting an employee’s ability to compete or go to work elsewhere in the same industry after their termination. Over the years, it has become harder and harder to enforce non-competition clauses and provisions, which is a good thing for employees and executives.

More recently, there has been a strong push to abolish these types of restrictions and the severe impact they have on an employee’s right and ability to earn a living in their area of work/profession. In October 2021, the Ontario Government passed legislation prohibiting employers from entering into employment contracts or other agreements with an employee that is, or that includes, a non-compete agreement, with a limited exception permitting such agreements for certain executive employees. This is an excellent means to challenge the enforceability of such restrictive clauses for departing employees. Whether such restrictive terms in a contract are valid and legally enforceable depends on a close review of the contract and the restrictions imposed, together with a detailed study of the background facts.

Employers with the possibility of a departing employee competing against them usually seek to prevent this by first suing the employee or group of employees and then bringing a motion for injunctive relief. An injunction, if properly commenced, can usually be heard within days or weeks. The tactical advantage for an employer is significant; you can have your case heard within days or weeks whereas the main action may take years to sort through the court process.

Non-Solicitation Clauses

Non-solicitation clauses and provisions are contractual terms in a contract designed to prevent a departing employee from taking active steps to encourage, entice, or poach current employees to leave employment and compete against their current employer, or current clients or customers of the employer to take their business elsewhere.

These cases tend to be very fact-specific and usually turn on an analysis of who approached who and when. Not surprisingly, email, text messages, and phone records are critical to the outcome. Sophisticated legal counsel can assist departing employees by ensuring a proper and complete factual record to achieve the desired goal.

Confidentiality Clauses

Confidentiality clauses and provisions in a contract seek to protect an employer’s interest in what is confidential and not otherwise within the public domain from being used improperly. But not everything is confidential.

The courts will intervene where the facts warrant it, such as the taking of a secret formula to produce a unique product, or otherwise using trade secrets.

However, more confidentiality provisions are being struck down in the courts due to poor drafting which seeks to over-reach, or where the courts believe the provision is otherwise unreasonable. Ontario courts will often interpret vague and ambiguous requirements against the party who drafted it, usually the employer. The law in this area is in a serious state of flux and is changing daily.

Privacy Rights

Again, employers may seek to restrict what a departing employee can do with information which amounts to and impacts privacy rights. A departing employee who has access to an employee’s private information and then uses it for an improper purpose may well become embroiled in a legal dispute with the former employer, who was the gatekeeper of the private information.

In Ontario, there is currently limited legislation dealing with privacy rights in employment. There is an exception for medical information, however. Federal legislation known as the Personal Information Protection and Electronic Documents Act (PIPEDA) may be relevant. Other federal legislation may also come into play regarding privacy rights.

These cases usually involve employer-supplied cell phones and laptops, and the extent to which an employee retains a privacy interest. The case law relating to privacy rights and the ability of an employer to use otherwise private information relating to an employee is developing, but moving in the right direction in restricting and limiting what an employer can access and use against an employee. Each case, however, turns on its own facts.

Restrictive Covenants Lawyer

If you need a lawyer to help with any form of restrictive covenant, Contact Evans Law Firm today for a free no-obligation consultation. Sometimes time limits can bar an otherwise good claim from being advanced. Please don’t delay and contact us as soon as possible. There is no cost until we are formally retained and a written retainer agreement is in place.

Executives are a unique class of employees and, as such, have been treated differently by the courts. Courts have recognized that executives are entitled to more extended notice of their termination, as the availability of comparable employment opportunities is fewer than that of regular employees.

While there is no rigid definition of what constitutes an executive, few would doubt that there is a nature and quality to their employment that makes them different. Title alone does not determine whether someone holds the status of an executive. This assessment is based on various facts and circumstances surrounding the employment relationship and the individual’s status in an organization.

Executive Compensation

Executives, while employees, are unique and often have compensation entitlements different from other types of employees. Given their status and significance to employers and their business undertakings (and contributions to profitability), it is common for executives to be granted and receive compensation entitlements such as stock options, equity grants, bonus incentives, expense accounts, and retention bonuses.

The language and drafting of the policies related to executive compensation entitlements are typically fundamental to an assessment of an executive’s entitlement generally or upon departure. While many policies purport to disentitle executives from particular aspects of their compensation upon termination, those provisions may not be enforceable in court.

More recently, it appears the courts are prepared to intervene to ensure that bonuses and other incentives are paid where appropriate, and consider a number of factors in making that determination.

Executive Employment Lawyer

If you need an executive employment lawyer, Contact Evans Law Firm today for a free no-obligation consultation with an executive employment lawyer. Sometimes time limits can bar an otherwise good claim from being advanced. Please don’t delay and contact us as soon as possible. There is no cost until we are formally retained and a written retainer agreement is in place.

By its nature, the term workplace harassment evokes an expansive definition of conduct by someone in the workplace that is unwelcome, whether known or ought to be known to be offensive, embarrassing, humiliating, or demeaning to an employee or group of employees. Harassment doesn’t have to be linked to legislative prohibitions against discrimination, but it can be.

Workplace sexual harassment is a sub-category of workplace harassment. The scope of what could constitute workplace sexual harassment is broad and depends on a comprehensive review of all the facts and circumstances. It can include overt acts and more subtle behaviour. What constitutes workplace sexual harassment has included everything from leering, inappropriate comments, touching, inappropriate jokes, solicitation, abuse of power for a sexual purpose, to sexual assault.

The Ontario Human Rights Code

The Ontario Human Rights Code prohibits workplace sexual harassment in sections 5(2) and (3) as follows:

Harassment because of sex in workplaces

(2) Every employee has a right to freedom from harassment in the workplace because of sex, sexual orientation, gender identity or gender expression by his or her employer or agent of the employer or by another employee. R.S.O. 1990, c. H.19, s. 7 (2); 2012, c. 7, s. 6 (2).

Sexual solicitation by a person in position to confer benefit, etc.

(3) Every person has a right to be free from,

• a sexual solicitation or advance made by a person in a position to confer, grant or deny a benefit or advancement to the person where the person making the solicitation or advance knows or ought reasonably to know that it is unwelcome; or
• a reprisal or a threat of reprisal for the rejection of a sexual solicitation or advance where the reprisal is made or threatened by a person in a position to confer, grant or deny a benefit or advancement to the person. R.S.O. 1990, c. H.19, s. 7 (3).

Workplace Policies

Consensual sexual relationships arising out of a workplace, even between a supervisor and a subordinate, involve complicated legal and factual issues surrounding consent and the conferring of benefits or rewards. Most employers will have drafted policies and conducted educational seminars or training related to harassment and sexual harassment in the workplace. Lack of such training or policies, including any vagueness or ambiguity in the terms of any relevant policies, may provide the basis for a partial or complete defence to the challenged conduct.

Workplace Harassment Lawyer

If you need a workplace harassment lawyer, Contact Evans Law Firm  today for a free no-obligation consultation with a workplace harassment lawyer. Sometimes time limits can bar an otherwise good claim from being advanced. Please don’t delay and contact us as soon as possible. There is no cost until we are formally retained and a written retainer agreement is in place.