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Can my employer force me to sign a non-compete clause?
Could you comment on Canadian case law about non-compete clauses? My new employer is insisting that I sign one, and the battle to get it removed is proving unhealthy for my relations with the employer even before I start. I checked with a local lawyer and he felt the non-competes are worthless in a Canadian context and not enforceable.
Customers are seldom attracted to one company or another exclusively by virtue of the services they are offered. Rather, their loyalty often lies with the relationships that are built and the key employees who have built them. That is why employers will go to great lengths to protect their business from departing employees, often by compelling them to agree to contractual limits on post-employment competition.
While courts permit employers to protect their business through these contractual limitations, for a number of reasons, they often rule that employers have gone too far. A recent Ontario case provides a perfect example.
If the clause is provided to the employee after work begins, even if on the first day, it will not be enforceable unless it is provided along with something of value in exchange for signing it, such as a bonus, raise or promotion. If an employee is required to sign the clause mid-tenure, it is sometimes wise to not even protest it, since it will never be enforced.
In short, most non-compete clauses are excessive, and thus will be upheld only in very limited circumstances.