4 ms·

Non competes in Canada are also enforced very selectively. The standard legal advice is to structure the agreement such as it still stands (severability) even i

Non competes in Canada are also enforced very selectively. The standard legal advice is to structure the agreement such as it still stands (severability) even if specific parts of it are struck down because of how likely that is. For non compete to work, the affected person has to have specific knowledge to protect (usually client accounts) and the restriction needs to be narrow to specific industry ("software" is not good enough, "Point of Sales software for Bars and Restaurants" probably is), duration needs to be only as short as it needs to be and geographically bounded. The only time broad non-compete really hold up is for things like sales of a business where the founders are barred from immediately competing with the company they just sold.

cookiecaper 11y ago
It should be noted that in the U.S., there are really 50 individual jurisdictions. Contract law is a state matter. Some states may be better or worse at upholding non-competes. California in particular is known for disregarding non-competes. Also, many non-competes go totally unenforced. It's rare that a suit over a non-compete is actually filed for low-level employees. In the linked article, the writer wasn't fired because her old company sued her for competing, she was fired simply because the new company found out she had signed a non-compete and presumably wanted to avoid any potential lawsuit-related shenanigans. It's also possible that the company is trying to establish a precedent for voluntary, pro-active enforcement of competitors' non-competes within the industry specifically because they know the courts are unlikely to uphold them. If all the employers just agree not to hire someone who worked at a competitor within the last 2 years, then they don't need to worry about what the court thinks (though they may have to face the DOJ in a wage-fixing scandal, like the computer animation industry has).
- acveilleux 11y ago
  I've seen a couple cases of non-competes being enforced by small companies as retaliation for an employee leaving. I've never seen it holding up in court but frankly neither instance was very rational. They were someone taking someone else quitting very personally.
- hexagonc 11y ago
  In the linked article, the writer wasn't fired because her old company sued her for competing, she was fired simply because the new company found out she had signed a non-compete and presumably wanted to avoid any potential lawsuit-related shenanigans. Unfortunately, this isn't quite accurate, as shown by the Q&A at the end of the article. Although her previous employer didn't directly sue her, it essentially threatened to sue her. Moreover, the way her new employer found out about her previous non-compete agreement was because her old employer specifically notified them and indicated that she had confidential information. Her new company basically had no choice but to fire her.
  - chrismcb 11y ago
    How does your statement differ from the parent statement? And yes her new company had a choice, they could have kept her and dealt with the court issue if it came up.
    - hexagonc 11y ago
      I didn't say the quoted section was false, I just said it was inaccurate because it gives an inaccurate impression of what was happening in the original article. Without reading the article, you might think that she was fired due to the 'chilling effects' of non-competes. However, in this case, the threat was more tangible. Her new company didn't just find out about the non-compete 'through the grape vine', they found out because the previous company forcefully notified them. This gives a much greater indication of intent to sue then if the prior company had kept quiet about it, as they apparently did for most other employees. Remember, it was apparently a well-known fact that employees from her firm occasionally moved to 'competing' firms. This was why she wasn't initially worried about the non-compete in the first place, because she didn't think they would enforce it. Reuters probably got rattled once they saw that Law360 was serious about the non-compete. Technically, Reuters could have gone to court on her behalf but why bother unless she was some highly sought-after journalist? Intimidating letters are meant to make you weigh your choices carefully. Also, while Law360 didn't literally sue her, it gave every indication that it intended to if she continued at Reuters.
- Scarblac 11y ago
  Even the UK probably differs between England and Scotland, and the EU is 27 further jurisdictions. It's different everywhere. But common sense applies everywhere; if you don't understand it don't sign it, if you don't want to be held by it then don't sign it, if you promise never to enforce it then just take it out of the contract.
pc86 11y ago
> The standard legal advice is to structure the agreement such as it still stands (severability) even if specific parts of it are struck down because of how likely that is. I don't know about Canada but in the US this is standard for any contract of any type. The vast majority of contracts I've signed have specific clauses to that effect as well.
slantyyz 11y ago
Well, you're assuming that it makes it to court. Based on personal experience with this in Canada -- there's significant expense and stress involved when you're on the receiving end of a lawsuit from a former employer who had deep pockets and an ax to grind. This is even more true if you've got a mortgage and family. Even when you're in the right, you're more likely to take the least expensive route to make the suit go away than to fight to the finish.

cookiecaper 11y ago

It should be noted that in the U.S., there are really 50 individual jurisdictions. Contract law is a state matter. Some states may be better or worse at upholding non-competes. California in particular is known for disregarding non-competes. Also, many non-competes go totally unenforced. It's rare that a suit over a non-compete is actually filed for low-level employees. In the linked article, the writer wasn't fired because her old company sued her for competing, she was fired simply because the new company found out she had signed a non-compete and presumably wanted to avoid any potential lawsuit-related shenanigans. It's also possible that the company is trying to establish a precedent for voluntary, pro-active enforcement of competitors' non-competes within the industry specifically because they know the courts are unlikely to uphold them. If all the employers just agree not to hire someone who worked at a competitor within the last 2 years, then they don't need to worry about what the court thinks (though they may have to face the DOJ in a wage-fixing scandal, like the computer animation industry has).

acveilleux 11y ago
I've seen a couple cases of non-competes being enforced by small companies as retaliation for an employee leaving. I've never seen it holding up in court but frankly neither instance was very rational. They were someone taking someone else quitting very personally.
hexagonc 11y ago
In the linked article, the writer wasn't fired because her old company sued her for competing, she was fired simply because the new company found out she had signed a non-compete and presumably wanted to avoid any potential lawsuit-related shenanigans. Unfortunately, this isn't quite accurate, as shown by the Q&A at the end of the article. Although her previous employer didn't directly sue her, it essentially threatened to sue her. Moreover, the way her new employer found out about her previous non-compete agreement was because her old employer specifically notified them and indicated that she had confidential information. Her new company basically had no choice but to fire her.
- chrismcb 11y ago
  How does your statement differ from the parent statement? And yes her new company had a choice, they could have kept her and dealt with the court issue if it came up.
  - hexagonc 11y ago
    I didn't say the quoted section was false, I just said it was inaccurate because it gives an inaccurate impression of what was happening in the original article. Without reading the article, you might think that she was fired due to the 'chilling effects' of non-competes. However, in this case, the threat was more tangible. Her new company didn't just find out about the non-compete 'through the grape vine', they found out because the previous company forcefully notified them. This gives a much greater indication of intent to sue then if the prior company had kept quiet about it, as they apparently did for most other employees. Remember, it was apparently a well-known fact that employees from her firm occasionally moved to 'competing' firms. This was why she wasn't initially worried about the non-compete in the first place, because she didn't think they would enforce it. Reuters probably got rattled once they saw that Law360 was serious about the non-compete. Technically, Reuters could have gone to court on her behalf but why bother unless she was some highly sought-after journalist? Intimidating letters are meant to make you weigh your choices carefully. Also, while Law360 didn't literally sue her, it gave every indication that it intended to if she continued at Reuters.
Scarblac 11y ago
Even the UK probably differs between England and Scotland, and the EU is 27 further jurisdictions. It's different everywhere. But common sense applies everywhere; if you don't understand it don't sign it, if you don't want to be held by it then don't sign it, if you promise never to enforce it then just take it out of the contract.

pc86 11y ago

> The standard legal advice is to structure the agreement such as it still stands (severability) even if specific parts of it are struck down because of how likely that is. I don't know about Canada but in the US this is standard for any contract of any type. The vast majority of contracts I've signed have specific clauses to that effect as well.

slantyyz 11y ago

Well, you're assuming that it makes it to court. Based on personal experience with this in Canada -- there's significant expense and stress involved when you're on the receiving end of a lawsuit from a former employer who had deep pockets and an ax to grind. This is even more true if you've got a mortgage and family. Even when you're in the right, you're more likely to take the least expensive route to make the suit go away than to fight to the finish.