The HR Space: Biting The Fiduciary Bullet: A Case For Post-Employment Restrictive Covenants

Post employment restrictions can be tricky to enforce.  But if drafted properly, they can be very valuable.  As one Alberta employer recently discovered in ADM Measurements Ltd. V. Bullet Electric Ltd, relying on implied fiduciary duties to do the job of contractual restrictions can be a pricey gamble.

Background

The employer, ADM Measurements Ltd. ("ADM"), was an electrical and instrumentation company servicing oilfield facilities throughout northern Alberta.  ADM operated by hiring private contractors to do much of their work.  In 1997, ADM entered into a verbal agreement with a particular contractor, Greg Young.  Although the terms were never formalized, it was agreed that if Young continued to work for ADM and grow the company, he would later have the right to buy ADM.