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Contracts and employment agreements

All employment relationships in Ontario are deemed to be contractual, whether or not a written contract is in place between the parties. When there is no written contract, the common law (judge-made law) imports a number of obligations into the contract that will bind the employer and the employee.

 

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Ontario Employment Law Conference wrap-up: We learned the latest!

Last Tuesday, over 100 businesses from across Ontario joined us and the employment law team from Stringer LLP to discuss pressing employment issues like avoiding occupational health and safety penalties, accommodating employees’ family status, getting ready for the new Employment Standard, using employment contracts to protect your business, and the perils of employee benefits.

 

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Learn the latest! — Specific termination provision upheld after sale of business

When a company purchases another business, it is important to consider the legal implications respecting the status of employees. The Ontario Superior Court recently decided a case regarding the validity of an employment contract where an employee had signed an agreement with his former employer but never executed a new agreement when the company was purchased by another business. The plaintiff argued that the employment contract only governed the previous employment relationship. The Court disagreed, finding that the terms of the employment contract still applied.

 

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Impact on employees in company mergers can be significant

Anyone following the financial news over the last number of years has no doubt noticed the increasing frequency with which corporations are merging, or being bought out by other corporations. This often results in efficiencies for the corporations, hopefully leading to greater profit. However, the impact on the employees is often overlooked. Whether the transaction is a share purchase, asset purchase, or other type of structure, the impact on the buyers and sellers is clear. However, the impact on the employees is often less certain.

 

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Court confirms high threshold to enjoin a former employee from engaging in competition

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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.

 

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Navigating the minefield: Court of Appeal reiterates distaste for restrictive covenants

Hunter Harrison, the former Chief Executive Officer of Canadian National Railway (CNR), faces a dilemma in dealing with his obligations under a non-compete covenant to his former employer. Harrison is being pursued by CNR competitor Canadian Pacific Railway to assume the position of CEO, but taking that position might violate the non-compete agreement.

 

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How to craft an enforceable non-solicitation clause

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.

 

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Superior court refuses employer’s request for injunction

In yet another example of the reluctance of the Ontario Superior Court to restrict competitive activities of former employees, the Court rejected an employer’s request for an injunction…

 

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Competing with former employers

The Ontario Superior Court re-affirmed the freedom of employees to leave their employer and set up a competitive business.

 

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Employee exodus: has Moses led your employees to the promised land?

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?

 

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