Restrictive Covenants - Detailed Analysis

Last Updated: October 2022

(b) Corporate Amalgamations and Restructurings

In an application for an interlocutory injunction, a British Columbia court was prepared to reach a preliminary judgement that a plaintiff company, which had been the product of several amalgamations and one asset transfer from a parent company to a wholly-owned subsidiary, did not lose its right to enforce the terms of its employment contracts, including restrictive covenants, because of the amalgamations.1 In the same decision, the court held it was also “at least strongly arguable”, under the common employer doctrine, that the transfer of assets was a valid assignment of the assets and hence the restrictive covenants.2

  1. Yellow Pages Group v. Anderson, 2006 BCSC 518 (CanLII), at para. 28. The Court cited both the effect of British Columbia’s Business Corporations Act and the Alberta case of Pattilo v. Murphy Canada Exploration Ltd., 2001 ABQB 1070.
  2. Yellow Pages Group v. Anderson, 2006 BCSC 518 (CanLII), at para. 29, citing Valley First Financial Services Ltd. v. Trach, 2003 BCSC 223.