Canada: Can The Refusal To Sign A Non-Competition Clause Constitute A Just And Sufficient Cause For Dismissal?

Last Updated: September 20 2012
Article by Elodie Brunet


In Jean c. Omegachem inc.1, a recent decision of the Court of Appeal, the Court held that an employee's refusal to sign a non-competition agreement during employment is not a just and sufficient cause for dismissal.2 Although the employer had discussed the non-competition agreement with the employee at the time of hiring, it had presented it to the employee only three years after he had started working.


In 2002, Patrick Jean was hired by Omegachem Inc. ("Omegachem"), a company that specializes in organic chemistry and that conducts business with the world's leading pharmaceutical corporations.

When he was hired, Mr. Jean was told that he would have to sign a mandatory confidentiality and non-competition agreement, which was a requirement for all of the employees. However, when he began working, Mr. Jean had only signed a confidentiality agreement. He was asked to sign a non-competition agreement three years later. Initially, the agreement was for 24 months and applicable in Canada, the United States and Europe. Mr. Jean refused to sign the agreement unless he received severance pay equal to 24 months' salary. Omegachem put its draft agreement on hold.

A year and a half later, Omegachem presented Mr. Jean with a revised draft of the non-competition agreement. The proposed agreement was for 12 months but applicable worldwide. Mr. Jean refused to sign it. Omegachem sent him a demand letter demanding that he signs it and alleging that his refusal to do so would jeopardize their relationship of trust. Mr. Jean maintained his refusal to sign the agreement unless Omegachem agreed to compensate him financially. Omegachem refused.

Omegachem dismissed Mr. Jean in April 2007. The following month, Mr. Jean filed a complaint with the Commission des relations du travail ("CRT") under section 124 of the Act respecting labour standards.3


The issue before the CRT and the Superior Court, the two lower-level decision-making authorities, was whether Mr. Jean's refusal to sign the non-competition agreement proposed by Omegachem was a just and sufficient cause for dismissal. The CRT answered that question affirmatively and its decision was upheld by the Superior Court on judicial review. However, the Court of Appeal reversed the Superior Court decision and quashed the two CRT decisions.

When Mr. Jean started working with Omegachem in 2002, no non-competition agreement was presented to him. It was only in 2005 that Mr. Jean was asked to sign such an agreement. The Court of Appeal was of the view that in order to hold, as did the CRT, that Mr. Jean had breached a fundamental condition of his contract of employment, the non-competition agreement must have been submitted to him when he commenced his job, as provided for in his contract of employment. The Court of Appeal explained that because the CRT did not consider these specific facts, its decision was not well-founded.

The Court of Appeal was of the view that the CRT should have also considered the formal requirements of article 2089 of the Civil Code of Québec4 (the "C.C.Q."), which specifically provides that in order to be valid, a non-competition clause must be stipulated in writing and in express terms. Furthermore, according to the law of contracts, for contractual obligations to be valid, they must be determinate or determinable.5 As such, Mr. Jean could not have legally bound himself without knowing the scope of the obligation to which he would have been subjected. According to the Court, by failing to consider these statutory provisions, the CRT made a "proposition that is unacceptable in law".

Lastly, the CRT should have considered the legality of the non-competition agreement with regards to article 2089 C.C.Q. On its face, the second version of the agreement was problematic regarding the territory it covered, i.e., "everywhere in the world". According to article 2089 C.C.Q., a non-competition clause is valid only if it is limited as to time, place and type of employment. As such, the Court of Appeal, explained that a clause is not limited as to place if it applies to "everywhere in the world". Therefore, the CRT could not reasonably conclude that Mr. Jean's refusal to sign the non-competition agreement constituted a just and sufficient cause for dismissal since its validity was prima facie questionable.

Considering that the dismissal of an employee is a serious matter with important consequences, the Court explained that an employer can unilaterally and without prior notice terminate a contract of employment only if it can be shown that it has serious reasons or just and sufficient cause for doing so. However, the decision to dismiss, without notice, an employee who refuses to sign a non-competition clause while employed, which is presented to him for the first time three years after he was hired, is not a just and sufficient cause for dismissal. If Omegachem attached such importance to the non-competition agreement to the extent that it chose to dismiss an employee who refused to sign such an agreement, it could only do so by compensating that employee.


This Court of Appeal decision highlights a general rule of contract law, which states that a person is not bound to perform an obligation without knowing the terms of that obligation or without the obligation being "determinate or determinable". In addition, when a contract of employment obligates an employee not to do something, that obligation must be reasonably identified. Needless to say, the content of the obligation itself must not be contrary to the law. Omegachem should have presented the non-competition agreement to Mr. Jean at the time of hiring, and not three years later, and the agreement should have respected the parameters established by article 2089 C.C.Q. Lastly, this judgment emphasizes that it is in an employer's best interest to strategically plan its non-competition and non-solicitation agreements.


1 2012 QCCA 232 (C.A.).

2 This judgment overrules the two decisions rendered by the Commission des relations du travail (the "CRT") (2009 QCCRT 0076 and 2009 QCCRT 0368) as well as the judgment rendered by the Superior Court of Québec (2011 QCCS 1059 (C.S.) in this case.

3 R.S.Q., c. N-1.1.

4 S.Q., 1991, c. 64.

5 Article 1373 C.C.Q.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.