Whether a frontline employee on an hourly wage or a senior salaried executive with extensive and complicated variable compensation, there is an equally shared truth upon termination of employment: it hurts, and you are now required to negotiate your termination package in the midst of emotional and financial turmoil.
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.