Non-solicitation clause

A. Definition of the non-solicitation clause

Non-solicitation clauses are the last of the three (3) main restrictive methods used by an employer to protect its clientele from dishonest employees.

As for its scope and limits, the non-solicitation clause falls between the non-competition clause, which can be much more restrictive towards former employees, and the duty of loyalty, which is intended to be a general obligation of good faith and conduct which extends to a few months after the end of the contract of employment.

It is important to define the term “solicitation” correctly in order to understand this legal concept and distinguish it from the non-competition clause and the duty of loyalty.

Conventional dictionary definitions of the term “solicitation” have been referred to in applicable case law as the conduct of someone being reproached much more than simply occasionally or casually.

B. Scope, duration and extent of the non-solicitation clause

A non-solicitation clause must be written explicitly in the contract of employment for it to be valid, enforceable and imposed on an employee or former employee. Its limits lie in the protection of the employer’s interests.

Therefore, advertising which is addressed to the general public cannot be considered solicitation.

To recognize a breach of a non-solicitation clause, an employer will have the burden of proving in court that a former employee has actively and insistently solicited a client from the company. The threshold to meet this burden is high and it is therefore difficult for employers to rely on such a clause.

The duration and scope of a non-solicitation clause depends on the field of business in which the company operates and its type of clientele. Depending on the employment contract, it may remain in force up to one (1) year after the end of the employment relationship and may apply nationwide.

Fact Pattern

Question : Joey is starting a new management job with a company. When signing the contract of employment, he realizes that it prohibits him from contacting, in any way, large customers once the contract of employment has come to an end. According to Joey this clause is illegal since its scope is far too broad. The company responds that it has all the rights to include a non-solicitation clause of this kind in the contract to protect its customers from new employees who might be in bad faith. Is Joey’s challenge valid?

Answer: Yes! This non-solicitation clause is far too broad and cannot meet the definition of “solicitation”. Therefore, it is possible for the employer to include such a clause in the employment contract, but it must comply with the scope and duration criteria developed in the jurisprudence.

Conclusion

In view of the foregoing, it is important to remember that to benefit from optimal protection, an employer ought to resort to all the abovementioned restrictive measures within reasonable limits. Absent thereof could result in an endangerment of intangible assets and expose oneself to possible complex legal disputes.

[1] MBI Acquisition Corp. c. Bournival, 2008 QCCS 2232 (CanLII)

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