Are non-compete clauses in sales employment contracts valid? Here’s what one employment law expert thinks.
Question About Non-Compete Clauses in Employement Contracts
A few years ago I submitted the following question about whether non-compete clauses were enforceable in today’s job market to the TV show “Canada AM” for a segment on employment law:
“Non-compete clauses seem to be more common in employment contracts these days. To paraphrase: “If you leave our company, you cannot work for another company in the same industry for a period of two years”. Are these clauses valid; or just a scare tactic so you won’t leave to work for a competitor? What should you be careful of when signing a contact that contains such a clause?”
The question was answered by the employment lawyer, Daniel Lublin, from Toronto, Ontario, Canada.
What an Employement Lawyer Thinks
To paraphrase Lublin, there is a misconception in the workplace that non-compete clauses are not valid. Although in the past, some of the stipulations were completely unreasonable, in recent years, the courts have given better guidelines on how to make these agreements enforceable. As such, employers are getting better at drafting them. For example, for most people, a non-compete clause between 6 to 9 months is reasonable, and for senior managers and executives, 12 t0 18 months is the norm.
Lublin recommends carefully reviewing the post-employment obligations outlined in the employment contract before signing it. The same goes before you ask a potential employee to accept one. If you are not sure, don’t sign or offer it without seeking the advice of a lawyer first.
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