Do you use fixed-term employment contracts that include non-competition, non-solicitation and/or confidentiality clauses? Be careful when renewing fixed-term contracts. According to a recent decision of the Quebec Superior Court, unless such clauses are expressly stipulated in writing in the new contract, they will not be renewed. In Traffic Tech Inc. c. Kennell, the Court held that the restrictive covenants stipulated in a fixed-term contract were not of the essence of the contract; therefore, unless they are stipulated expressly and in writing in the new contract, non-competition, non-solicitation and confidentiality clauses are not tacitly renewed along with the contract of employment. So, if you use such fixed-term contracts and they include restrictive covenants, make sure that when you renew the contract, you stipulate all such terms and conditions again in writing, including all restrictive covenants. If you fail to do so, your company will almost certainly forfeit the protection of the non-competition, non-solicitation and confidentiality clauses if the employee joins a competitor and, in asserting its rights, the company will have to rely on the duty of loyalty provided for in the Civil Code of Québec, which affords very limited protection.

Marianne Plamondon MBA, CRHA/CHRP
Associée
Partner