Non-competition clause: Important clarifications

Under the Civil Code of Quebec, it is permitted to insert a non-competition clause in a written employment contract. However, it is imperative that the non-competition clause be clear and that it be limited as to the time (eg: 6 months), place (eg: territorial limits of a city) and to the type of employment (eg: specific functions) and only for what is necessary to protect the legitimate interests of the employer. A clause which does not respect all these conditions would then be declared inapplicable by the courts. According to the Quebec Court of Appeal, courts do not have the power to amend or rewrite a non-competition clause. So, a non-competition clause is either valid or it is not.

If as an employer you consider a former employee to be in breach of his or her non-competition obligation, then you will be able to go to court to try to obtain an injunction, as well as damages. Important point: an employer can not invoke a non-competition clause, if he terminated the contract without a serious reason or if he himself gave the employee such a reason for termination. (eg: constructive dismissal)