Topic: Restrictive Covenants

Court Applies Lesser Scrutiny to Non-Solicit, Finding Investment Advisor’s Sale of Good Will in Clients Part of Sale of a Business

Mandeville Holdings Inc. v. Santucci, 2021 ONSC 4321 An investment advisor’s negotiated sale of the good will in his book of business to a firm causes the Ontario Superior Court to construe his non-solicitation covenant as part of the sale of a business, not within an employment context. The court issues…
Read More

Post-Resignation Restrictive Covenant Upheld as a Commercial, not Employment Agreement

WJ Packaging Solutions Corp. v Park, 2021 BCSC 316 The BC Supreme Court holds that a five-year agreement prohibiting competition by a departed employee is enforceable, with less scrutiny applied as being a commercial agreement. The decision raises interesting considerations for employers contemplating negotiating non-compete or non-solicit covenants with former employees…
Read More

The Re-Emergence of Blue-Pencil Severance of (some) Restrictive Covenants

City Wide Towing and Recovery Service Ltd v Poole, 2020 ABCA 305 The Alberta Court of Appeal holds that blue-pencil severance may be used to alter restrictive covenants that restrain employee competition, provided the covenant was part of the sale of a business. The practice of “blue-pencil” severance in employment…
Read More

Is Consideration Still Necessary to Enforce Restrictive Covenants? A Consideration of the British Columbia Court of Appeal’s Decision in Rosas v. Toca

The British Columbia Court of Appeal radically altered the law of consideration last year in Rosas v. Toca. The Court held that, absent duress, unconscionability or other public policy concerns, a mid-contract variation will be enforceable as long as the parties agree to the variation. Against Rosas stand judicial presumptions of an inequality…
Read More

Former Telus Executive Escapes Non-Compete due to “Overzealous Drafting”, but Rebuked for Pursuing Termination Payment while Negotiating New Employment with Competitor

Telus Communications Inc. v. Golberg, 2018 BCSC 1825 A battle between corporate titans Telus Communications and Rogers Media highlights the danger of “overzealous drafting” of restrictive covenants, which enabled a former Telus executive to compete against his former employer. At the same time, the Supreme Court of British Columbia rebukes…
Read More

Employee’s Non-Competition Covenant Attached to Share Purchase Attracts Rigorous Interpretation.

961945 Alberta Ltd (Servicemaster of Edmonton Disaster Restoration) v Meyer, 2018 ABQB 564, 2018 ABQB 564 The Alberta Court of Queen’s Bench holds that even where the evidence did not support an imbalance of bargaining power, the more rigorous approach to interpreting restrictive covenants was warranted in respect of a…
Read More

The Perils in Drafting Restrictive Covenants and the Importance of Context

Ceridian Dayforce Corporation v. Daniel Wright (2017 ONSC 6763),853947 B.C. Ltd. v. Source Office Furniture & Systems Ltd. (2016 BCSC 2233) A recent decision of the Ontario Superior Court of Justice refusing to enforce a non-competition clause highlights the many ways in which the drafter of a restrictive covenant can go too…
Read More

Less is More – “Loyalty Incentives” Upheld

Canada’s big five banks and the financial planning industry will benefit by paying close attention to the difference between a “loyalty incentive” and a restraint of trade, as canvassed thoroughly by the Ontario Superior Court in Levinsky v. The Toronto-Dominion Bank, 2013 ONSC 5657. Levinsky, a managing director with TD Securities Inc.,…
Read More

Arguing Ambiguities in Restrictive Covenants – The Pendulum Swings Back to Enforceability

One of the most-used strategies to argue that a non-compete or non-solicit provision is unenforceable is to point to any possible ambiguity in the wording used. In the leading Canadian decision, the Supreme Court of Canada held in J.G. Collins Insurance Agencies Ltd. v. Elsley Estate, 1978 CanLII 7 (SCC), that in order…
Read More

Economic Disincentives to Compete Found to be Restraints of Trade

The B.C. Court of Appeal’ decision last year in Rhebergen v. Creston Veterinary Clinic, 2014 BCCA 97, is both a win and a loss for employers seeking to restrain employees from competing with them post-employment. In both instances, the decision will have long-reaching effects over employer’s strategies to implement effective restraints and the…
Read More