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What happens to non-compete clauses when you are fired in Alberta?

Non-compete clauses are sometimes included by Employers in their employment contracts. So what happens if you fired? If you are fired with cause, arguably they are still enforceable. If you are fired without cause however the courts can take a different approach.

In the case of Specialized Property Evaluation Control Services Ltd v Les Evaluations Marc Bourret Appraisals Inc, 2016 ABQB 85, the Court said at paragraph 25:

[25] Wrongful dismissal repudiates the employment agreement and terminates the contract, thereby discharging parties from future obligations: Windship Aviation Ltd. v deMeulles, 2002 ABQB 669 and Globex Foreign Exchange Corp. v Kelcher, 2011 ABCA 240. Hunt JA stated in Globex at para 72 that an employer who wrongfully terminates a contract of employment should not be able to capitalize on its failure to give notice or damages in lieu of notice by enforcing prospective obligations against an innocent employee. Wrongfully dismissed employees are excused from compliance with restrictive covenants. This is the case even where the contract, as here, mentions termination “for whatever reason, including an unjustified termination by SPECS”: Globex at paras 67-72.

So in certain instances, terminated employees are not bound by restrictive covenants. If you would like advice on whether restrictive covenants are binding, please feel free to contact us.

The information contained in this article is not legal advice. No solicitor client relationship is formed through this article. The reader is encouraged to retain counsel for advice in these matters.

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