The Ontario Court of Appeal has held that the words "accept
business", in what the employer intended to be a
non-solicitation clause, served to restrict competition and is
therefore not merely a non-solicitation clause.
In this case, the personal defendant, Mary Murphy, was employed
by the plaintiff Donaldson Travel Inc. ("DTI") as a
travel agent from October 2004 to April 2007 and then again from
June 2007 to February 3, 2012, when she resigned from that
employment. On February 6, 2012, Ms. Murphy commenced employment as
a travel agent with the defendant, Goliger's TravelPlus
Following Ms. Murphy's resignation, DTI brought claims of
breach of contract, misappropriation of confidential information,
inducing breach of contract and interference with contractual
relations against Ms. Murphy, Goliger's and its President and
director. Its claims were dismissed on a summary judgment motion,
and DTI appealed to the Court of Appeal.
One of the issues on appeal was whether the motion judge erred
in finding that the restrictive covenant in Ms. Murphy's
contract with DTI was in fact a non-competition clause rather than
a non-solicitation clause, and therefore that it was unreasonable
The clause at issue stated:
Mary agrees that in the event of termination or resignation that
she will not solicit or accept business from any corporate accounts
or customers that are serviced by Uniglobe Donaldson Travel,
directly, or indirectly.
The Court of Appeal agreed with the motion judge that, based
primarily on the language "or accept business", the
restrictive covenant did in fact restrict competition and was
therefore a non-competition clause. Further, the Court of Appeal
held that since this non-competition clause contained no temporal
limitation, there was no basis on which to interfere with the
motion judge's conclusion that the clause was unreasonable and
DTI's appeal was dismissed with costs of $7,500.00 awarded
to each defendant.
The key takeaway from this case is to ensure that the language
of restrictive covenants is carefully chosen, so as to avoid
inadvertently going beyond what is considered sufficient in the
circumstances (in this case a non-solicitation clause) to protect
an employer's proprietary interest.
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Unfortunately, reasonable accommodation for employees in the workplace continues to be the source of significant litigation and even today we continue to see outrageous examples of employers behaving badly.
We are now beginning to see reported cases involving charges and subsequent fines laid against employers for failing to provide information, instruction and supervision to protect a worker from workplace violence.
On October 13, 2016, the Supreme Court of Canada denied leave to appeal an Ontario Court of Appeal decision which ordered an employer to pay a former employee 37 months of salary and benefits following termination.
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