Not everyone keeps track or had classes about employment agreements, laws and regulations. It is not a simple topic, being full of legalese and complex theory that the average person cannot fully understand. For this reason, most workers are not well-versed in Alberta employment law, and they are at no fault for it. Unfortunately, some employers will take advantage of this fact and, maliciously or not, will come up with contracts or create work environments that are not entirely legal.
Once again, hiring lawyers in Calgary is in your best interest to ensure your rights are protected and that you are not being taken advantage of.
It is important to mention that employment regulations are provincial, and depending on where you are, you may find different clauses that are unenforceable. In Alberta, one of the most common such clauses is restrictive covenants. To better understand the topic and defend yourself in your workplace, here is what you need to know.
What are restrictive covenants?
Restrictive Covenants are clauses in employment contracts which put in place restrictive measures on the employee in the best interest of the employer either before starting work or sometime after the employment ends. There are three main types of restrictive covenants:
- Non-competition agreements
- Confidentiality, or non-disclosure agreements (NDA)
- Non-solicitation agreements
Those restrictions can create a serious possibility of damage to someone’s re-employability, but the good news is that there are situations where those clauses are unenforceable. Learning how to identify terms in your contract or verbal conditions in the workplace is essential to keep yourself and others safe and respected while performing your job.
First, it is important to understand what each of these restrictions means to better establish a line of defence in case of need. As always, you can find the best employment lawyers Calgary, who will have your best interest in mind while conducting your case, as they are experts able to defend your rights.
Among all of the unenforceable clauses, Non-Competitive Agreements are the most common. What it basically does is that it tries to restrict the employee from competing with their employer during their time with the company—and sometimes even after the employment relationship is severed.
It varies from contract to contract and depends on the nature of the work, but in general terms, it limits the ability of the employee to work for other competing employers, within a certain geographic area, or specific industry. For example, if a person works for a fast-food restaurant, this clause would prevent them from seeking a job in another restaurant of the same nature, even after they no longer work for the first.
Terms like this may be enforceable, but the situation changes when it tries to limit the capacity of the worker to earn an income. In other words, as long as your contract is not preventing you from working in your field, having a livelihood or simply having the freedom to choose a job, it can be legal—if not, the clause is unenforceable. However, the clause needs to be carefully drafted into the contract and always depends on the nature of the job and position.
Most people already heard of Non-Disclosure Agreements, and some even had to sign one. Most common in big corporations and office spaces, a non-disclosure agreement, or NDA, is an agreement of confidentiality that prevents the worker to share sensitive or confidential information of which they became aware during their employment. It exists to protect the employer, its clients, partners, and associates from having information shared with possible competitors or with the public.
For the most part, NDAs are enforceable and valid clauses of employment contracts. Some professionals hold valuable information about the company they work for and could harm the business by disclosing sensitive information about their investors, operations, intellectual property, etc.
However, NDAs must be reasonable, and specific, and address only internal company matters. A business cannot force its employees to sign NDAs to hide its problematic practices or to prevent the worker from practicing their skills. That is, the Agreements cannot be used to force a person to not apply somewhere else the scientific knowledge that they gathered during their work, nor it can be used to silence workers regarding bad practices of the company, especially in case of discrimination and sexual harassment.
People have the right to speak their minds, seek justice and apply their knowledge outside of work, and NDAs cannot, under no reasonable cause, take this right away from them.
Similar to the non-competition agreement, Non-solicitation Agreements limit the ability of the worker to compete with their former employee, but in different ways. In this case, the clause prevents the worker from reaching out to employees, clients, and customers with the intention of conducting business either during or after the employment relationship.
In other words, Non-Solicitation Agreements restrict the competitiveness of people and companies in the business market. The intention behind those agreements, from the employer’s perspective, is to maintain exclusivity in the field and gather all clients and profits. However, people have the right to make a living in the ways they see fit—even if it is starting a business that is a direct alternative to their former employer.
It is important to highlight that this clause may, too, be legal and enforceable. Similarly to NDAs, employers need a reasonable motive behind the terms, and the courts may agree. To protect yourself, you should always reach out to a lawyer and ask for advice.
How enforceable are restrictive covenants?
When those matters are taken to court, the justice system tends to favour the employee, generally seeing the clauses as limiting for the worker and the market competition, unless the employer can reasonably justify the restrictions.
Under Alberta law, a restrictive covenant needs to meet a few criteria before it is considered valid. They must be the least invasive as possible, take into consideration the employee interests, the reason for the restriction must be legitimate and proprietary, must be clearly informed in the contract of all pertinent information of time and geographic area, and must not deviate from standard practices conducted by the industry.
Many contracts do not meet all criteria, either for being too restrictive for the employee or for being too broad and ambiguous. Non-solicitation and non-competition agreements that don’t take the employee into consideration are often the most common ones to not be enforceable.
Similarly, most contracts are not specific enough on their terms such as time frame, which activities specifically are restricted, and the detailed geographical area in which the employee becomes restricted to do those activities. Wrongful dismissals also often make those restrictions unenforceable. An employment lawyer in Calgary can support you not only with those clauses but also with terminations without cause.
What to do when dealing with a restrictive measure?
As previously mentioned, your best line of defence is to hire an employment lawyer. This trained professional is able to properly understand contracts and their nuances in order to defend you and your interests.
Most of the time those restrictive covenants are not enforceable, but they can be legally binding documents as well. If a restrictive covenant is in fact enforceable, the only way out is by negotiating with your employer, so an employment lawyer in Calgary can and will act to properly support and check if the clause is actually enforceable or not.