In a decision rendered last week, the Québec Court of Appeal confirmed that if an employer wants an employee to be subject to restrictive coveneants (e.g., not to compete), those covenvants better be signed before the employment starts. In Jean c. Omegachem inc., 2012 QCCA 232, an employee, Mr. Jean, before being hired, agreed via email to sign a non-compete agreement. The details and tenor of that agreement were not provided to him. Three years after he started, his employer asked him to sign the agreement. It was quite broad and would have prohibited him from working for a competitor for 2 years over a very broad geographic area. Mr. Jean refused to sign without compensation. Negotiations broke down and Mr. Jean was terminated for cause – the cause being that he refused to sign an agreement he had undertaken to sign prior to his employment.
The Court of Appeal sided with the employee, stating that not only was the agreement overly broad but that the employee could not be held to sign something surrendering signifiant rights based on a vague undertaking taken three years prior. In the Court’s view, the employer had the obligation to have the employee sign at hiring. His refusal to sign three years later could not constitute just cause for dismissal.
The lesson? Make sure they sign before they start!