In negotiating senior executive employment agreements employers
often seek lengthy notice periods from employees who wish to
resign. The reasons for this usually revolve around the difficulty
recruiting a replacement with specialized skills and the need to
ensure a smooth transition without competition from the executive.
Whether the employee fulfills this obligation, however, has often
been considered more of a moral, than a legal, obligation on the
basis that it was unlikely an employer could force an employee to
continue to provide services against his or her wishes. A recent
decision from the Ontario Superior Court of Justice challenges all
that. In Blackberry Limited v. Marineau-Mes, 2014 ONSC
1790 (CanLII), Justice T. McEwen has issued a declaration that an
executive is obliged to fulfill his contractual obligation to work
out a six month notice period.
Blackberry offered Marineau-Mes a promotion from SVP to EVP in
September 2013. A new employment contract accompanied the promotion
that Marineau-Mes signed on October 16, 2013. The contract provided
that six months' written notice was required of resignation,
unless Blackberry waived the notice period in whole or in part. The
difficulties Blackberry went through in the fall of 2013 are well
known and Marineau-Mes began discussions with Apple in the same
time frame he signed the contract with Blackberry. After accepting
an offer from Apple, on December 23, 2013, Marineau-Mes gave
Blackberry written notice of his resignation. He then indicated he
intended to join Apple approximately two months later. Blackberry
took the position this was insufficient. Marineau-Mes ceased to
provide services to Blackberry on January 6, 2014.
To enforce Marineau-Mes' obligation, Blackberry applied for
a declaration that the contract was binding and that Marineau-Mes
was required to provide six months' written notice of
resignation through June 23, 2014. Marineau-Mes took the position
Blackberry's claim was confined to damages if he started his
job with Apple prior to the expiry of the notice period. Damages,
of course, would have been very difficult for Blackberry to prove
as they aren't easily quantified. Marineau-Mes also asserted
that the contractual resignation provision was contrary to the
Employment Standards Act, 2000 (as it did not permit the
continued accrual of vacation pay) and public policy (as it was
effectively a non-competition covenant). The Court rejected
Marineau-Mes' various arguments in their totality finding the
contract and his obligations thereunder to be enforceable.
Decisions regarding employees' resignation obligations are a
rarity. The resignation period often will expire before a court
date can be secured. This case is a useful reminder that
executives' obligations will be enforced, if employers can get
to court in time to do so.
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.
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