Don't Let A Restrictive Covenant Bite You In The Assets

The challenges of enforcing non-competition and non-solicitation clauses in employment contracts are well known.  It is less renowned that such clauses may increase the reasonable notice period owed by an employer to a dismissed employee, as we were reminded in a recent decision by the Supreme Court of British Columbia:  Ostrow v Abacus Management Corporation Mergers and Acquisitions.  

The defendant, a private equity company, employed Mr. Ostrow as a senior manager to provide tax advice. There was a termination clause in his employment contract that allowed for "reasonable notice according to the law or pay in lieu of notice in accordance with the law". The contract also included a six month non-competition clause.