To Compete or Not to Compete… That is the Question!

/ Posted in Business Law, Featured Articles

Can your ex-employer stop you from working after your employment ends?

It is pretty normal to find non-competition and/or non-solicitation provisions in employment agreements in today’s competitive employment market.  By signing such an agreement as an employee, you are agreeing not to compete with your employer and/or solicit that employer’s customers within a certain geographical area, for a certain period of time following the termination of your employment.

For example, a non-solicitation provision may stipulate that “Edward the employee will not solicit Elinor the employer’s customers for 2 years after his employment with Elinor ends”.  A non-competition provision might state that “Edna the Employee will not work for any business within the City of Kelowna that is competitive with Ernest the Employer’s business for a period of 5 years after Edna’s employment with Ernest ends.”  So what happens when opportunity knocks and you are offered a better job with a competitor?  Are these provisions enforceable?

While your employer is entitled to protect its legitimate business interests, he or she is only able to do so in a reasonable manner. If a non-solicitation or non-competition provision is viewed by a Judge as being too broad and a general restraint on trade, the provision will likely be found to be void and unenforceable.  Whether or not any one provision is enforceable is completely dependent on the specific facts in each case.

Where a restaurant owner includes a non-competition provision in its employment contracts to restrict its waiters from working as a waiter anywhere in the world for a period of 10 years following the termination of employment, the provision will likely not be enforceable.  On the other hand, where the owner of a hair salon includes a provision in his or her employment contracts restricting his or her salon’s manager from working in a competing salon within 10 miles of the employer’s salon for the period of 1 year, there is a greater likelihood that such a provision would be enforceable.

If you or someone you know is considering a job change, we would be happy to help you determine your contractual rights and obligations and how the contract could affect your future employability.

image courtesy of  Seattle Municipal Archives

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