Non-Competition Clauses

by | Mar 15, 2023 | Employment Law

As an employer, you do have the right to include a non-competition clause, in British Columbia, as part of offering employment but the clause has to be reasonable.  A non-compete clause essentially restricts an employee from activities that cause “competition” with the employer even when the employee is no longer employed. For example, this can include restricting an employee from opening a new business that is the exact same as the previous employer.

There is the presumption in courts that non-compete clauses are unenforceable however a leading case Iris The Visual Group Western Canada Inc. v Park, 2017 BCCA 301 provided clarity on how to rebut this presumption. The court clarified the test to be used and the considerations that need to be made in determining the enforceability of non-competition clauses.

Courts will use a heightened scrutinized test to assess the context of the non-compete clause. In employment contracts there is heightened scrutinization of non-compete clauses due to the imbalance of power between an employer and employee. Then the courts will consider the following:

  1. What is the nature of the interest of the employer that it is trying to protect?
  2. Whether a non-compete clause is necessary to protect this interest?
  3. If it is necessary, what is the scope needed to protect this interest in a non-compete clause?

If a non-compete clause is too broad, too long or vague then it will not be enforceable. When wanting to include a non-compete clause in an employment agreement it is best to attain legal advice to determine if it is necessary and ensure that it is enforceable. 

This this information is not intended to be a substitute for legal advice. Individuals should consult with their personal legal professional regarding the information provided herein.

<a href="" target="_self">Anne-Marie Mizzi</a>

Anne-Marie Mizzi

Anne-Marie started her legal career at our Summerland office May 2021. She is be a recent Juris Doctorate graduate from Thompson Rivers University. While at Thompson Rivers University she participated in the Law Rugby Club and Access to Justice Club. She earned her Bachelor of Arts Degree in Political Science from Saint Francis Xavier University in 2018. While at Saint Francis Xavier University she was the vice president of the Political Science Society and was a member of the Model United Nations team. Wherever she goes she likes to be involved in the community and looks forward to participating in what Summerland has to offer. She is also an animal lover having a cat of her own!