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Restrictive Covenants

Advertisement in trade magazine, launching of website establish prima facie breach of non-solicit agreement

Jurisdiction: - British Columbia
Sector: - Insurance

In Hub International (Richmond Auto Mall) Ltd. v. Mendham, 2011 BCSC 1780, the BC Supreme Court found that a former employee's advertisement for his new marine insurance company in a trade magazine and the launching of his new company's website established a prima facie breach of the non-solicit agreement he had entered into with his former employer, Hub International.

Specifically, the court stated:  read more »

"Non-Compete Clauses: An International Guide"

Jurisdiction: - United States

Lus Laboris has published a guide entitled, "Non-Compete Clauses: An International Guide" (May 2010).

As set out on their website , the lus Laboris alliance is comprised of member law firms in 42 countries, with coverage in more than 100 countries. Its specialisms include: individual employment contracts; collective redundancies; discrimination; expatriation; restructuring; compensation, benefits and tax; pensions; collective bargaining; workplace policies and handbooks; litigation and dispute resolution; and corporate social responsibility.

The Lus Laboris website describes the guide as follows:  read more »

ONCA allows appeal, grants declaration that restrictive covenant is unreasonable and therefore unenforceable

Jurisdiction: - Ontario - United States
Sector: - Manufacturing

In Mason v. Chem-Trend Limited Partnership, 2011 ONCA 344, the Ontario Court of appeal overturned the application judge's decision and ruled that the following restrictive covenant was unreasonable and therefore unenforceable against a 17 year technical salesperson whose employment was terminated for just cause:

I agree that if my employment is terminated for any reason by me or by the Company, I will not, for a period of one year following the termination, directly or indirectly, for my own account or as an employee or agent of any business entity, engage in any business or activity in competition with the Company by providing services or products to, or soliciting business from, any business entity which was a customer of the Company during the period in which I was an employee of the Company, or take any action that will cause the termination of the business relationship between the Company and any customer, or solicit for employment any person employed by the Company.

Top Issues Facing BC Employers

Jurisdiction: - British Columbia

Vancouver based law firm Bull Housser Tupper has published its "Annual List of Top Issues Facing BC Employers" (December 30, 2010). In order, the five issues are:  read more »

Employee-shareholder dismissed for cause awarded damages for improper invocation of Shareholders' Agreement

Jurisdiction: - Ontario

In Link v. Venture Steel Inc. and Ruben Rivas, 2010 ONCA 144 the Ontario Court of Appeal upheld a decision in which a former Vice-President of Sales was awarded more than $4 million in damages, most of which related to company shares the employer had improperly purchased, pursuant to a Shareholders' Agreement, at the time it dismissed the employee for just cause.

The case also addressed the issue of how non-competition and non-solicitation provisions in a Shareholders Agreement will impact on a court's analysis of whether an employee's mitigation efforts were reasonable.

Lawyers at Fasken Martineau has prepared a summary of the case ("Beware the Perils of Firing Employee-Shareholders", June 22, 2010) that can be found here

Non-solicit provisions that restrict contact with potential clients/customers and former employees not reasonable

Jurisdiction: - British Columbia

In F & G Delivery Ltd. v. MacKenzie, 2010 BCSC 195, the court considered whether non-solicitation provisions that restricted a former employee from contacting the employer's "potential" clients or customers and "former" employees was reasonable and thus should be enforced by way of an interlocutory injunction.

Background

MacKenzie commenced his second stint of employment with F & G Delivery Ltd. ("F &
G") in 2003. F&G's business was delivering freight and equipment in BC, and a large portion of its work was comprised of crane servicing.

Non-Competition and Confidentiality Agreement

At the time he was re-hired by F&G, MacKenzie signed a Non-Competition and Confidentiality Agreement that included the following provisions:

F & G and the Employee agree that in consideration of F & G providing
employment to the Employee, the Employee shall not,  read more »