Enforcing Non-Competition & Employment Agreements

This article was originally published in Blakes Bulletin on Labour & Employment - February 2005

Two types of clauses in employment and non-competition agreements frequently become the subject of litigation, usually on the issue of enforceability. This article addresses some key enforcement issues employers should note before, during and after executing these agreements.

The most commonly litigated clause attempts to restrict competition following the end of the employment relationship. The second most frequently litigated is the termination clause.

One of the leading cases on the enforceability of post-employment restrictions is still the 1935 decision of the Supreme Court of Canada in Maguire v. Northland Drug Company Limited. As recently as January 2003, a judge of the Ontario Superior Court of Justice confirmed Maguire is good law in Ontario.