In Survival Systems Training Ltd. v. Survival Systems Ltd., the Nova Scotia Supreme Court recently dismissed a company’s motion for a injunction to prevent former employees from engaging in competitive activities. The Court confirmed that employers must meet a high threshold in order secure an injunction which would effectively prevent a former employee from working in their chosen vocation.
Generally speaking, a restrictive covenant acts to restrict the activities of a former employee after their employment has ended. They usually come in one of two forms: non-competition clauses and non-solicitation clauses. The law on restrictive covenants is that they are prima facie unenforceable as they are in restraint of trade and therefore against public policy. In order to be enforced, they must be proven by the party that seeks to enforce them to be a reasonable limit on trade.
The Ontario Superior Court re-affirmed the freedom of employees to leave their employer and set up a competitive business.
You arrive at the office Monday morning to discover that your Senior Vice-President of Marketing and three of your sales people have resigned and accepted jobs with your competitor. You quickly realize that this has the potential of seriously harming, if not destroying, the company’s business. Do you have any recourse against the departing employees or the company to which they have moved?