esources issues like never before. Employers would be well-advised to consider the ways in which their actions at every step of the employment relationship, including those taken at the very beginning, can create or mitigate legal risks.
The Court of Appeal for Ontario has confirmed that in an asset sale, a purchaser’s offer of employment to a seller’s employee can constitute consideration for changes in an employment contract — including a new termination clause.
The facts of this case are extremely unique. We more commonly see the courts using the doctrine of consideration to deny employers the ability to enforce restrictive termination clauses imposed after employees have already commenced working. However, the ruling gives employers hope that, if the circumstances were sufficiently extreme and an employee’s behavior egregious, the courts will apply the doctrine of consideration to an employer’s advantage.