Non-Competition and Non-Solicitation Agreements and Post Departure Conduct
In the modern workplace, most employees eventually will move on from their current place of work to another employer. Statistic Canada says that, annually, more than eight percent of Canadians change their jobs.
In many instances, employers have legitimate concerns about their employees moving to competitors.
Will they lose customers that decide to follow the employee?
What if the ex-employee starts calling on customers to persuade them to move their business?
What if they have taken with them confidential information such as customer lists or pricing structures?
In each of these cases, the employer may wish to take pre-emptive steps to protect against competition by a former employee.
Equally, employees who are contemplating leaving for a competitor may have many concerns.
Can I compete given there is a non-compete clause in my contract?
Can I go after the customers I’ve been serving for many years?
Will I get sued by my employer if I leave for a competitor?
Pulver Crawford Munroe LLP advises and represents both employers and employees on these matters. Our employee competition practice entails advising on the following matters:
Assessing enforceability of non-compete and non-solicit clauses
Drafting non-compete or non-solicit clauses
Acting for clients in injunction proceedings (court applications to prevent certain forms of competition)
Acting for both employers and employees in claims for damages arising from alleged breach of obligations, such as breach of non-competes, non-solicits and fiduciary duties and misuse of confidential information
Providing independent legal advice to employees contemplating leaving one employer for a competitor
Providing strategic advice to employers or their prospective employees on how to move employees from one company to a competitor while reducing the risk of litigation
Our Employee Competition Practice Group
Effective, timely and cost-efficient advice is important when it comes to employee competition and experience matters. Our lawyers have deep experience advising both employers and employees. Group members include:
Dean A. Crawford, K.C.
Dean writes extensively in the area of employee competition. He is the author of the Canadian Employee Competition Blog, an extensive review of the law of non-competes, non-solicits and other employee competition matters. His experience is recognized by his fellow lawyers in the employment bar, who frequently refer clients needing advice in this area to him.
Dean has advised several employers and employees in employee competition cases, in the investment advisor, insurance broker and several other sectors. He has advised more than 30 investment advisors and their new employers when they have moved their practices to new firms.
Published cases:
National Bank Financial Inc. v Canaccord Genuity Corp., 2018 BCSC 857
Dean successfully defended three investment advisors and their new employer in defeating an application by their former employer for an injunction to prevent them from soliciting the clients in their book of business.
National Bank Financial Ltd. v LePoidevin, 2018 BCSC 1175
National Bank Financial Ltd. v LePoidevin, 2018 BCSC 1190
Dean represented 13 members of an investment advisory team and their new employer in legal proceedings brought against them by their former employer after they moved their practice.
Paul M. Pulver
Paul acts for a wide variety of employers and employees in the private and public sectors. He often appears as counsel in the British Columbia Supreme Court, as well as the British Columbia Court of Appeal, and federal courts. He regularly advises employers and executives in departure and competition matters, including pre-departure advice, and post-departure strategy and negotiation. If necessary, he litigates such matters from the initial claim and injunction application, through the liability and damages phases of trial.
Paul has represented employers and litigated employee competition matters in virtually every business sector, including banking, financial, insurance, commercial real estate, auto, manufacturing, industry, technology, hospitality and professional services (medical, legal and accounting).
Frequently Asked Questions
What is a non-compete clause?
A non-compete clause is an agreement between and employee and their employer. Typically, the employee agrees not to compete with their employer for a period of time after employment ends. The restriction on competition typically is time-limited, e.g. six or twelve months. Often, it only applies to employment in certain roles (such as the role the employee filled) and to certain areas, e.g. Canada or Canada and the United States.
What is a non-solicitation clause?
Under a non-solicitation clause, an employee is permitted to compete with their former employer, whether that be with a new company or by starting their own business. However, they are prohibited from directly “soliciting” customers or clients of the former employer. In other words, the clause prohibits outreach to old customers or clients to entice or poach them away. Sometimes such clauses also prohibit attempts to lure away other employees of the former employer. Often, an agreement will prohibit both types of solicitation.
As is the case with non-compete clauses, non-solicits typically are for a limited time duration, e.g. six or twelve months. Sometimes they also only apply to certain areas, e.g. British Columbia, Canada or the United States.
What are restrictive covenants?
The term “restrictive covenant” is a legal term to describe either a non-compete clause or non-solicitation clause. In both cases, a “covenant”, or promise, is given by the employee to restrict the nature of their potentially competitive activity after employment ends.
What Value do Employers Gain from Non-Competes or Non-Solicits? Is that Fair?
Canadian courts have said that employers often have legitimate interests in their customer base to protect and can make limited use of non-competes or non-solicits. For example, where an employee is the “personification of the company” to the customers, such that they would follow the employee to a new employer, a time-limited non-compete may be justified. Where an employer introduces an employee to several customers, it may be legitimate to prohibit the employee from trying to poach those customers after the end of employment for a period of time via a time-limited non-solicit.
On the other hand, the courts have held that employers are not entitled to use these clauses for the sole purpose of stifling competition. In fact, the courts recognize the rights of individuals to earn a living and will carefully scrutinize non-competes and non-solicits to ensure they are justified and go no further than necessary to protect the employer’s interests.
I Have a Non-Compete Clause in my Contract. I’ve Heard the Courts Don’t Enforce Them in Canada, so I Suppose I Have Nothing to Worry About if I Leave to Take Up Work with a Competitor of My Current Employer?
It is true that, very often, employers insert non-compete or non-solicit clauses in their employment agreements that are not enforceable. Often, the courts refuse to enforce them because they are ambiguous, too long in duration or go further than necessary to protect the employer’s legitimate interests. However, some employers are more careful and hire employment lawyers to draft these clauses to ensure they are enforceable.
It is a good idea for you to have an experienced employment lawyer review your contract to assess the enforceability of your non-compete or non-solicit. The lawyers at our firm have extensive experience reviewing such clauses for enforceability.
I’m an employer. How can I make sure my non-compete or non-solicit clause is going to be enforced by a court?
We highly recommend you hire a skilled employment lawyer with experience drafting such clauses. While no lawyer can provide you a 100% guarantee the clause will be enforced, an experienced employment lawyer can significantly increase the prospect of enforcement. Our firm has considerable experience drafting such clauses for our employer clients.
My former company says I cannot compete with it, as I was a fiduciary. What does that mean?
Some employees, typically very senior management and a limited number of other key employees, are considered to be fiduciaries, meaning they must act in the best interest of their employer at all times. A fiduciary’s duties may include not competing or soliciting former customers for a reasonable period of time after departure. It is wise to consult with legal counsel to assess whether you truly are a fiduciary and, if so, the nature of your obligations to your former employer.
I’m an Employer and am Considering Hiring Some Key Employees of my Competitor. Should I Obtain Legal Advice?
In short, yes. As a hiring employer, you can be sued in the courts by employees’ former employer for a variety of unlawful acts in the hiring process. These can include claims for inducing breach of contract, i.e. encouraging employees to disregard their non-competes or non-solicits, or for encouraging them to leave without providing reasonable notice of their resignation. It is very prudent to obtain legal advice to immunize yourself as much as possible from such claims.
Pulver Crawford Munroe LLP is proud to announce that seven of our lawyers were recognized in The 2023 Canadian Legal Lexpert® Directory rankings for British Columbia earlier this month. Lexpert® Canada recognizes the country’s leading practitioners and firms. Being “Lexpert-ranked” is an acknowledgement of excellence by our peers and colleagues. We are honoured that our lawyers have […]
On March 9, 2023, British Columbia’s Bill 2, the National Day for Truth and Reconciliation Act, received Royal Assent. As a result, the National Day for Truth and Reconciliation, which occurs on September 30th each year, is also now a public holiday in the province of British Columbia for all provincially regulated employers. For more information about […]
On February 7, 2023, the BC government introduced Bill 2, National Day for Truth and Reconciliation, to recognize September 30 as a public holiday. Once passed, the Bill will amend the Employment Standards Act to include the day as the 11th provincial statutory holiday. September 30 is already recognized as a holiday for federal employees, […]
160 years of serving the southern Vancouver Island business community is no small feat. Pulver Crawford Munroe LLP is proud to be a member of this dynamic organization. The Chamber is dedicated to building connections among Island entrepreneurs and innovative organizations and advocating for initiatives at all levels of government in BC to support the […]
PCM Lawyers is pleased to be listed among the law firms recognized on The Globe and Mail’s list of Canada’s Best Lawyers 2023 for our work in Labour & Employment law. The awards list was announced on November 15, 2022, and can be viewed on the Globe and Mail website here. The Canada’s Best Lawyers list was curated based on […]
Negina Khalil On September 29, 2022, in Brown v. Planet Fitness (Dundas), the Human Rights Tribunal of Ontario dismissed an application alleging discrimination based on creed with respect to a mandatory vaccine policy. The decision was made following a hearing in writing. The applicant alleged that they were denied access to the facility because of […]
Although the effects of the COVID-19 pandemic have started to subside, the past year has been marked by upheaval in the personal and professional lives of workers across the country. In turn, Canadian employers continue to face new and emerging challenges to their businesses. On Tuesday, November 15, 2022 (11:00 AM – 1:00 PM, PDT), […]
Join Marcia McNeil and a panel of experienced counsel from Advocates for Employers of Canada for a discussion of Post-Pandemic Workforce Management. The panel addresses current employment issues, important legal developments, and practical strategies to help employers successfully navigate the new world of work. Topics include the following: Occupational health and safety considerations for post-pandemic […]
Congratulations to Susan Arnold, Dean Crawford, KC, Marcia McNeil, Craig Munroe, Paul Pulver, Peter Sheen, Marino Sveinson, and Jessica Thomson for being recognized by their peers and listed in the 17th Edition of Best Lawyers in CanadaTM in the fields of Labour and Employment Law. Recognition in Best Lawyers is widely regarded by both clients […]
In certain circumstances, an employer may temporarily change how an employee performs the duties of their job and it will not be considered constructive dismissal. In constructive dismissal cases, an employee must prove the employer evinced an intention to no longer be bound by the employment contract, and the employee can do so in one […]
Benke v Loblaw Companies Limited, 2022 ABQB 461 (CanLII) In this case, a grocery store employee, Mr. Benke, refused to comply with a municipal bylaw requiring face masks in public premises and his employer’s policy requiring face masks to be worn at the workplace. The court determined the employee’s refusal to perform his job in […]
Pulver Crawford Munroe LLP recently represented a Municipal Police Board (the “Board) in an arbitration decision which determined that a non-disparaging comments clause in a Settlement Agreement between the Board, a Police Association (the “Union”), and a Former Police Constable (FPC), was enforceable 17 years after the Agreement was originally signed. The Arbitrator determined that […]
Pulver Crawford Munroe LLP is proud to be recognized as a leading labour and employment law firm in the 2022 Lexpert® rankings for Vancouver. Since 1994, Lexpert® Canada surveys have recognized the country’s leading lawyers and law firms based on peer ratings and nominations. This achievement reflects the work and dedication of our entire team […]
Bill 10, the Labour Relations Code Amendment Act, 2022, was introduced by the Government of British Columbia on April 6, 2022. On June 2, 2022, Bill 10 received Royal Assent and is now in effect. As a result, business can expect significant changes to the bargaining unit certification process. The new amendments to the Labour […]
We are excited to announce that Pulver Crawford Munroe LLP has joined the South Island Prosperity Project (SIPP) as the first law firm member in their regional economic alliance. SIPP acts as an integrator of leaders and sectors to create key partnerships with the goal of collectively nurturing a more innovative, diversified, inclusive and sustainable economy. SIPP […]
The COVID-19 pandemic has significantly changed the nature of how work is done. What will the post-pandemic workforce look like across Canada? What new obligations and risks exist for Canadian employers? On June 7, 2022, Marcia McNeil of our office will join a panel of experienced counsel from Advocates for Employers of Canada to provide a seminar […]
We are delighted to announce that Craig Munroe has been recognized as a Canadian thought leader in the 2022 edition of Who’s Who Legal for labour and employment law. Who’s Who Legal publications feature over 27,000 of the world’s leading private practice lawyers and consulting experts. WWL reports are based on extensive research, including interviews […]
A recent arbitration decision, BC Hydro and Power Authority v International Brotherhood of Electrical Workers, Local 258, 2022 CanLII 25764 (BC LA), determined that BC Hydro’s mandatory vaccine policy was reasonable but the threat of discipline against those who remained unvaccinated was not. The decision is the first in BC to consider a mandatory COVID-19 […]
On April 6, 2022, the Government of British Columbia introduced Bill 10 to amend the Labour Relations Code (the “Code”). The proposed changes to the Code will re-introduce a single-step certification process which enables unions to be certified, without a vote, where 55% or more employees in the proposed bargaining unit have signed union cards. […]
The minimum wage in British Columbia will increase from $15.20 to $15.65 as of June 1, 2022. The BC Provincial Government calculated the increase based on a 2.8% average inflation rate. It appears the current provincial government intends to increase the minimum wage each year in accordance with an annual inflation rate. Since 2018, the […]
Congratulations to Susan Arnold, Dean Crawford, K.C., Pat Gallivan, QC, Marcia McNeil, Craig Munroe, Paul Pulver, Peter Sheen, and Marino Sveinson for once again being recognized by their peers and listed in the 2022 Edition of the Canadian Legal Lexpert Directory. The Canadian Legal Lexpert® Directory rankings and awards are well-recognized in the legal community, […]
Ontario’s labour legislation, like British Columbia’s, provides an opportunity for union members to bring complaints against their union to the Labour Relations Board asserting that the union did not properly represent their interests. On January 10, 2022, the Ontario Labour Relations Board dismissed the complaint of several unvaccinated healthcare personal support workers. The Board held that […]
In Shalagin v Mercer Celgar Limited Partnership, 2022 BCSC 112, the BC Supreme Court dismissed an employee’s wrongful dismissal lawsuit on the basis that the employee’s secret recordings of his co-workers was just cause for his termination given the effect on the relationship of trust between employer and employee. Takeaways The employment relationship depends on […]
On January 12, 2022, Arbitrator Randall Noonan issued a decision denying an application by the International Association of Professional Firefighters to stay the implementation of a mandatory vaccination policy (the “Policy”) by the City of Richmond (the “Employer”). In this case, the Employer had enacted its vaccination policy with a view to limiting the spread […]
Two Ontario Labour Arbitrators recently heard grievances from unions claiming the Employers’ mandatory COVID-19 vaccination policies were a violation of the respective collective agreements. In one case, the grievance was dismissed. In the other, the grievance was upheld. While these decisions come out of Ontario, they provide insight into how Labour Arbitrators are considering the legitimacy of mandatory vaccination policies. UFCW Local 333 v Paragon, 9 November 2021 The […]
The Province, after consulting with workers and employers across British Columbia, has legislated five paid sick days for employees regulated by the Employment Standards Act (the “ESA”).[1] Effective January 1, 2022, employees can take up to five days of paid leave per year for personal illness or injury. This is in addition to the three […]
PCM Lawyers is delighted to be among the law firms recognized on The Globe and Mail’s list of Canada’s Best Law Firms 2022. This prestigious award is presented by The Globe and Mail and Statista Inc., the world-leading statistics portal and industry ranking provider. The awards list was announced on November 16, 2021, and can […]
On September 22, 2021, a national panel of speakers from Advocates for Employers of Canada (AEC) held a webinar to discuss the current state of workplace accommodation law in Canada and provide practical tips and strategies for employers. Topics included: General Legal Principles Family Status Accommodation Religious Accommodation Disability Accommodation Drugs and Alcohol in the […]
British Columbia’s Public Health Officer recently announced proof of vaccination requirements in order to access certain non-essential events, services and business. The proof of vaccination requirements applies to all people in British Columbia who are 12+ years old. Key Dates By September 7, 2021, post-secondary students staying in on-campus student housing will be required […]
Workplace accommodation can be one of the most challenging issues faced by HR and LR professionals. The ongoing pandemic has added another nuanced layer to this already complicated area of law. Marcia McNeil is joining a panel of our colleagues at Advocates for Employers of Canada (AEC) for a 90-minute Zoom webinar covering the latest […]
On July 1st, 2021, B.C. progressed to Step 3 of the Province’s Restart Plan. Employers are no longer required to maintain a COVID-19 Safety Plan pursuant to WorkSafeBC requirements. Instead, employers can transition to developing a Communicable Disease Plan (CDP) as directed in a statement by the Provincial Health Officer. A communicable disease is an […]
On June 15, 2021, a national panel of speakers from Advocates for Employers of Canada (AEC) held an informative webinar for In-house counsel, human resources and labour relations professionals on the latest case law developments, practical tips, and strategies to address common contractual issues. Topics included: Termination provisions: is it possible to limit an employee’s […]
Looking to join one of BC’s leading labour and employment boutiques? Our strong growth has created an opening for up to two associates based in either our Vancouver or Victoria offices. We also are open to remote working arrangements. Our firm’s partners are peer-reviewed in Lexpert as leading practitioners in their fields. This is a […]
Tuesday, June 15, 2021 Webinar Alert for In-house counsel, human resources and labour relations professionals. Employment agreements are one of the most effective tools employers have at their disposal, particularly when it comes to limiting termination costs and liability. However, contracts need to be precisely drafted to ensure they are binding, enforceable, and serve their […]
An articling student successfully appealed her award of damages from her wrongful dismissal action against a Vancouver law firm and was awarded an additional $100,000 for her lost opportunity to become a lawyer, plus $25,000 in punitive damages by the Court of Appeal in Ojanen v Acumen Law Corporation and Paul Doroshenko, 2021 BCCA 189. […]
With the ongoing COVID-19 pandemic, federal and provincial sickness benefits have been put in the spotlight. This article reviews the availability of various sickness benefits for employees in British Columbia, including eligibility and the obligations of both employees and employers in relation to each benefit. Please note that this article does not address an employer’s […]
As we approach the one-year anniversary of the COVID-19 pandemic, we are finally beginning to receive guidance from the courts and other decision makers with respect to disciplinary responses by employers to employees’ failure to take reasonable COVID safety precautions in the workplace. Two recent arbitral awards out of Ontario, Garda Security Screening Inc. v […]
The global COVID-19 pandemic has challenged the modern world with extraordinary issues, from government-enforced shutdowns, to mass layoffs, to border closures, and more. The promise of an effective vaccine is fueling optimism but it is also giving rise to new issues as employers undoubtedly ask whether they can require employees to vaccinate. The answer isn’t […]
Jessica Thomson brings significant management-side expertise to the firm. She provides strategic advice and representation for employers in unionized and non-unionized workplaces. Jessica is listed in the 2021 edition of Best Lawyers in Canada™ in the fields of Labour and Employment Law. A highly skilled advocate, she represents employers in all labour relations dispute resolution […]
On Friday, October 9, 2020 the Supreme Court of Canada released its decision on Matthews v Ocean Nutrition Canada Ltd.[1] This decision was highly anticipated for its commentary on long-term incentive plan entitlements. Case Summary The appellant, David Matthews (“Matthews”) was employed by the respondent Ocean Nutrition Canada (“ONC”). As part of his […]
Employees have a right to refuse unsafe work, but can an employee refuse to work based on a risk of possible exposure to COVID-19? This article provides a general overview of the grounds for and process of refusing unsafe work in British Columbia, with specific considerations for work refusals made during the COVID-19 pandemic. When […]
On August 20, 2020, the Government of Canada announced further details on their plan to transition from the Canada Emergency Response Benefit (CERB) to Employment Insurance (EI). To aid Canadians in this transition, CERB has been extended by an additional four weeks to a maximum of 28 weeks. Additionally, changes are being made to the […]
The BC Employment Standards Act restricts the circumstances when an employer can lawfully proceed with temporary layoffs, and prior to the COVID-19 pandemic, only permitted eligible employers to temporarily lay-off employees for up to 13 weeks in a period of 20 consecutive weeks. In May the duration of temporary layoffs for reasons related to COVID-19 […]
As we move further into Phase 3 of British Columbia’s Restart Plan there have been some important changes in the COVID-19 labour and employment law landscape. Employment Standards Act The government of British Columbia has extended the temporary lay-off provisions under the Employment Standards Act to 24 weeks for employees laid-off due to COVID-19. Prior […]
Phase 2 of the Government of British Columbia’s plan to re-open the province’s economy and businesses commenced May 19 and ended June 23. Phase 3 commenced June 24, 2020. Businesses that decide to open or remain open must adhere to all public health orders issued by the Ministry of Health and follow guidelines from both […]
To provide more flexibility to employers and employees wishing to extend a temporary layoff due to COVID-19, the government of British Columbia has amended the definition of temporary layoff in the Employment Standards Act to increase the maximum length of a temporary layoff to 16 weeks in a consecutive 20 weeks, rather than the usual […]
Congratulations to Susan Arnold, Dean Crawford, K.C., Pat Gallivan, QC, Marcia McNeil, Craig Munroe, Paul Pulver, Peter Sheen, and Marino Sveinson for being recognized by their peers and listed in the 2020 Edition of the Canadian Legal Lexpert Directory. Lexpert is a widely respected peer review publication in the legal profession. This recognition confirms Pulver […]
Updated April 24, 2020 Canada Emergency Wage Subsidy As part of Canada’s economic support for businesses and workers facing impacts from COVID-19, the federal government announced the Canada Emergency Wage Subsidy (CEWS). The subsidy aims to help businesses avoid lay-offs and dismissals due to the COVID-19 pandemic by providing a significant wage subsidy to eligible […]
This article provides a summary of already-established and newly announced programs by the federal and B.C. provincial governments that are available to workers who are experiencing negative impacts to their earnings as a result of the global COVID-19 pandemic. Some of these programs described below require employers to apply in order for employees to be […]
Updated April 24, 2020 Many businesses in British Columbia have seen slowdowns in business that have impacted their staffing needs. In some cases, the impact has put the viability of their business at risk. Many employers have, or are considering temporarily laying-off employees as a response to the slowdown in business. It is important […]
At Pulver Crawford Munroe, our lawyers practice exclusively in labour and employment law. We know the players, we know the rules, and we have decades of practical experience. Our lawyers appear regularly before labour relations boards, human rights and employment standards tribunals, arbitration boards, and other administrative tribunals. We also have experience at all court levels, including the British Columbia and Federal trial and appellate courts, and the Supreme Court of Canada.
