PostHeaderIcon Supreme Court Declares Ambiguous Non-Competition Clauses Unenforceable.


The Supreme Court The Supreme Court of Canada reversed the ruling of the Court of Appeal. It found that the expression "Metropolitan City of Vancouver" was neither clear nor certain, and as such the restrictive covenant could not be validly upheld and enforced. The Court further articulated that it is not for the Court to step in and impose a meaning on an ambiguous clause that the parties themselves did not intend. Ruling otherwise would "invite the employer to impose an unreasonable restrictive covenant on the employee" given that the employer could rely on the Court to read down the language and enforce such a restrictive covenant.2

In Quebec, non-compete covenants are expressly governed by Article 2089 of the Civil Code of Quebec, which provides that a non-competition clause must be limited to time, place and type of employment and whatever is necessary for the protection of the legitimate interests of the employer, failing which it will not be enforceable. The Supreme Court decision further buttresses this legal rule.

This decision indubitably illustrates that courts will not step in to "save" or enforce language in an employment contract that is vague or uncertain. Employers cannot circumvent the absolute necessity of drafting clear, reasonable and unambiguous restrictive covenants, otherwise, they risk losing the faculty to protect their interests when faced with departing employees. Mondaq Business Briefing