Restraint of Trade

STACEY REGINALD BALL

82 SCOLLARD STREET TORONTO, ON, M5R 1G2

STACEY REGINALD BALL

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Restraint of trade clauses attempt to limit an employee’s ability to work in the same area or industry as the employer

ENFORCEABILITY

Non-Competition And Non-Solicitation Clauses

It is often assumed that if a provision is included in an employment contract, then that contract seals the fate of how an employee must act in the future. This is not at all true. Employment contracts may be unenforceable completely or in part, and one common dispute is the enforceability of various restrictive covenants. If an employer wants to enforce a restrictive covenant, the onus is on them to show the reasonableness of its terms. Examples of restrictive covenants are non-competition clauses or non-solicitation clauses (Please see articles on Non-Competition Clauses and Non-Solicitation Clauses). Both Canadian and Ontarianemployment law heavily regulate post-employment competition. Accordingly, these types of clauses are often unenforceable.

​Many factors contribute to the degree of enforceability. Employers should be aware that a great deal of skill is required to draft an enforceable post-employment restraint of trade clause. Both employers and employees should be aware that even if these types of clauses were agreed upon, they should not automatically be considered enforceable. For a post-employment contractual restraint of trade to be enforced, the courts have required it to be reasonable with respect to the temporal length, the geographic area covered, the nature of the prohibited activities and the overall fairness of the clause.

​The Supreme Court of Canada

The Supreme Court of Canada has also confirmed that the court will not rewrite an ambiguous or vague restraint of trade. See Sharon v KRB Insurance Brokers (Western) Inc., [2009] S.C.J. No.6. In the employment context, the courts are now sensitive to the generally accepted imbalance in power between employee and employer. The rigorous scrutiny of restrictive covenants is justified in light of this power imbalance, as opposed to those contracts which exist for the sale of a business. Workers should also be aware that courts will now classify restraint of trade provisions as illegal not only if they attempt to do so directly through express terms, but also if they attempt to do so through indirect means.

​See Rhebergen v. Creston Veterinary Clinic Ltd., 2014 BCCA 97. Please see the articles on “Non-Solicitation Agreements and Non-Competition Agreements” for more details on these specific restrictive covenants. Relevant case law that deals with restraint of trade clauses includes Terra Engineering Ltd. v. Stewart (1994), 56 C.P.R. (3rd) 77 (B.C.S.C.) and Lyons v. Multari, (2000), 50 O.R. (3d) 34 (C.A.). Please note that the above information does not constitute legal advice. It is general information about the law. If you require legal advice and assistance in an employment matter, please contact the experts at Ball Professional Corporation.

RELEVANT CASE LAW

CONSULTATIONS

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Canadian Employment Law

Mr. Ball is author of the authoritative and definitive text Canadian Employment Law - published by Canada Law Book (a division of Thomson Reuters). The text is used and cited by lawyers, law schools and judges across Canada.

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CLIENT REVIEWS

Google Reviews

Steven Wang
Steven Wang
19:58 18 Mar 19
Stacey was the third lawyer that I had hired to represent me, after the previous two didn't achieve anything for me. Stacey is very different. He is not only the author of Canadian Employment Law with profound knowledge and experience, he is also the most efficient one, direct to the point. He is the toughest one, well known by HR people, and he takes care of his client all by himself. There is no junior lawyers under him. That's the big difference comparing with other big employment law firms on Google, where I could only meet with a young lawyer with little experience. After he spoke with me for 45 minutes, he found the best way to break through. He didn't need to ask for a lot of document and he didn't bill hours to review them. His fee structure is aligned with his client's best interest. My problem was solved very quickly with a great result, and I only have to meet with him twice and exchange some emails. He's not just a tough fighter and negotiator, he got great strategy to make a deal. He answered my emails during the holidays. He comes in the office very early, and we had a conference call at 7am in the morning when we need to make a quick decision. To me, he is the best employment lawyer, a patient teacher and a friend. I strongly recommend him to those who need help.
Aiden Nix
Aiden Nix
01:13 06 Apr 19
Stacey was super helpful and increased my settlement a significant amount. He is very busy so you have to chase him down a bit but that is minor issue compared to all of the positives. Overall if you need a good labour lawyer then talk to him right away. He is THE lawyer to go to in Ontario!Thanks Stacey!
Sergei R
Sergei R
05:01 06 Dec 18
My experience with Stacey R. Ball was very positive. His fees are reasonable and value I received for the money was outstanding. Luckily, after his advice my situation was resolved almost amicably. You will not believe how reasonable some people can become after they start suspecting you have a good lawyer. An ounce of prevention is worth a pound of cure. If you suspect you might need a lawyer in the future because of some developing situation at work, I highly recommend you wait no more and talk to Stacey.
Danny T
Danny T
18:34 26 Feb 19
Stacey has recently represented me. He’s patient, but to the point which I can appreciate. No fluff. He worked quickly and even responded during his holidays. Definitely highly recommended.
Alexa Arsenault
Alexa Arsenault
19:36 01 Nov 18
If I could give Stacey Ball 30 stars I would! Stacey was right on the “ball” when it came to my legal matter. I called his office and his efficient staff scheduled me for an appointment the next day. He’s a great listener and comes to the point quickly, confidently, and succinctly. He explained best and worst case scenarios and dealt with my matter without delay. He was successful in concluding my legal matter to my satisfaction and met all my expectations. I highly recommend Stacey for all your legal matters.Alexa
Alex McMillan
Alex McMillan
18:05 21 Apr 19
Mr Ball represented me in a wrongful dismissal case. It was quite evident from my initial consultation until the conclusion of my settlement. Mr. Ball mirrored professionalism, empathy and above all confidence. Mr Ball reviewed my case and informed me what I was entitled to and what to expect at time of settlement. I was represented diligently right up to the conclusion of my settlement. He was able to negotiate an amount that was above my expectations. I would highly recommend Mr. Ball to anyone in need of assistance in any type of employment situations. In conclusion that one of the main things that impressed me most was that he at all times puts his clients FIRST.
Daphne Rodrigues
Daphne Rodrigues
23:54 22 May 19
Stacey was my second lawyer I retained after my original lawyer felt that he would be better suited to deal with my difficult employment matter. Stacey was very direct, efficient and respectful of my time. He was tenacious in negotiations and challenged/invalidated all points the other lawyer argued. I would not have achieved my outcome without Stacey. Thank you!Daphne Scott
Kate Miller
Kate Miller
15:35 23 May 19
Stacey gave me good advice on my first consult. Super professional and competent. If I ever need employment lawyer again I would definitely come back to Stacey!
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