On February 24, 2021, Morgan Rowe presented as part of a panel on pay equity issues in Canada, hosted by the University of Ottawa Association of Women and the Law and Employment Law Student’s Society. The panel discussed the ongoing work needed to address the gender pay gap, as well as the impacts of the recent federal Pay Equity Act and the Supreme Court of Canada’s 2018 decision striking down portions of Quebec’s pay equity legislation.

Andrew Raven, Andrew Astritis and Morgan had appeared before the Supreme Court on behalf for the intervener, the Public Service Alliance of Canada, to argue in support of a Charter challenge during the Quebec pay equity case.

On March 17, 2021, David Yazbeck will be moderating a webinar on “The Expansion of Whistleblower Rewards in Canada, the US and Globally”. The webinar, presented by the Whistleblowing Canada Research Society, will focus particularly on the Ontario Securities Commission Whistleblower Program, as well as other similar programs.

David will be joined by host Paloma Raggo, assistant professor at Carleton University and the Director of Whistleblowers Canada; Mary Inman, a partner at Constantine Cannon LLP and head of the firm’s international whistleblower practice; and Shaifali Joshi-Clark, a senior forensic accountant in the Office of the Whistleblower of the Ontario Securities Commission.

More details about the webinar can be found here. Attendance at the webinar is free.

David Yazbeck was recently invited to speak about whistleblower laws on the @Risk Podcast, with host Jodi Butts. David spoke about the risks inherent in whistleblowing and the proper response – or lack of response – from legislatures or other bodies. As part of the same episode, Ms. Butts interviewed Dr. John O’Connor, who is the first recipient of the Centre for Free Expression Whistleblower Initiative’s Peter Bryce Prize for whistleblowing.

David is a leading practitioner in the area of whistleblower law. He is also a member of the Centre for Free Expression Whistleblower Initiative’s Steering Committee, along with a number of high-profile whistleblower advocates.

The @Risk episode featuring David and Dr. O’Connor can be found here, as well as on Apple and Google podcasts.

April 28, 2021 marks the 30th National Day of Mourning in Canada. Community members are asked on this day to take some time to remember workers who have been killed, injured, or suffered illness due to workplace related hazards and occupational exposures.  

In the era of the Covid-19 pandemic, it has become especially apparent that some workers face greater risks when providing front line and essential services to the community. Many times, the workers who are placed in the most precarious positions are those that already face systemic barriers to equality.  Many are not able to work in the protection of their home, or access unpaid sick leave when providing care, food, transportation, and other vital services.  Frontline and essential workers have become ill, and some have even lost their lives due to work related exposures to the virus and other health hazards.

All Canadians should enjoy an equal right to workplaces that are safe, healthy, and respectful of every individual’s dignity. We encourage you to take some time today to reflect on the many sacrifices Canadian workers make when providing goods and services, and how you can demonstrate your support and commitment to the promotion of safe workplaces. 

On June 22, 2021, Sean McGee presented as part of a panel at l’Association des juristes d’expression francaise de l’Ontario’s annual congress. The panel addressed new developments in many areas of law, with Sean presenting specifically on ten key recent cases in the area of labour law.

RavenLaw is proud to sponsor an upcoming evening of music in support of Ottawa Blues for Youth, in connection with the Royal Ottawa Hospital. Ottawa Blues for Youth was created in the fall of 2020 by Anita Manley, with funds raised going to support Youth Mental Health at the Royal.

The event will be held on October 23, 2021, with ticket sales beginning in mid-August. For more information, click here.

On June 24, 2021, James Cameron and Karen Sisson presented as part of the Law Society of Ontario’s annual Six-Minute Employment Lawyer update. James and Karen presented on the interconnections between Long-Term Disability claims, the duty to accommodate disabilities in the workplace, and wrongful dismissal cases.

When presented with a contract related to work, whether as an independent contractor, dependant contractor, or employee, it is vital that you closely examine the terms of the proposed agreement. Proposed contracts may contain non-competition clauses that limit your capacity to participate in rival business ventures, sometimes long after the contractual relationship has ended. 

In most industries, an overly burdensome non-competition clause will severely limit the employee/contractor’s ability to perform alternative work in their chosen field.  Because the restrictions can have such a severe impact, courts have established that an appropriate balance must be struck between the protection of proprietary business interests and the prevention of unreasonable restrictions on trade.

As such, when taken to court, there is a presumption that all non-competition clauses are unenforceable. The party seeking enforcement must demonstrate that the clause is enforceable by showing the clause was freely entered into and that the terms are reasonable and necessary for the protection of proprietary business interest (such as a trade secret, a customer list, or a specific vulnerability to unfair competition). 

Two recent decisions of the Ontario Superior Court, 11766554 Canada Inc v Tingz Restaurant Bar LTD and Jihad Samaha (“Tingz”) and SI Systems Partnership v Geng (“SI Systems”) provide further clarity about the factors the Court will examine closely when determining if a non-competition clause is binding and enforceable. Both decisions place emphasis on the requirement to demonstrate that the signer is bound by the limitation, that the terms do not result in an unreasonable restriction on trade, and that the limitation is required for the protection of a legitimate business interest.

The agreement must be entered freely.

To be bound by a non-competition clause, a party must have entered into the agreement willingly and knowingly. In SI Systems, the Court found that identical non-competition clauses had bound one of the defendant consultants, but not the other. The consultant who was bound had signed the agreement with full knowledge of the non-competition clause, whereas the other consultant had the non-competition clause incorporated into a series of agreements, and the change of terms was never explicitly brought to their attention. The Court noted at paragraph 69, “an obscure clause that is buried in ‘fine print’ or complex language which could not be readily understood, or a provision that is startling and would be unanticipated, may engage a requirement to specifically draw the clause to the attention of the party”. 

The limitations must be reasonable.

Even if a non-competition clause is found to be binding, the presumption that a non-competition clause will be unenforceable still applies. To rebut that presumption, the clause must contain unambiguous and reasonable limitations. The two main limitations a court will consider is the geographic scope covered and the duration of the clause. 

In Tingz, the Court found that the geographic restriction of the clause, which spanned the entire City of Ottawa, was unreasonably broad and beyond that which would be required to provide protection against a loss of customers. As such, the Court stated that the clause was likely unenforceable. 

Likewise, in SI Systems, the clause sought to prevent the consultants from performing any consultation work on any contract between the RCMP and an alternative service provider. The Court found that this limitation was far too broad to be enforceable, given the abundance of RCMP contracts for IT services, and the fact that the RCMP is national, so the clause would restrict work across Canada. 

The limitations must be necessary to prevent harm

Further consideration of the Court is that a non-competition clause will only be enforceable if it is necessary and rationally connected to the protection of a proprietary interest. 

In Tingz, the Court found that it was reasonably foreseeable that a former business partner opening a rival restaurant with very similar characteristics just down the block from Tingz would cause serious harm. In that case, enforcing the clause was necessary for the protection of Tingz’s customer base. 

In SI Systems, despite one of the contractors being bound by the non-competition clause, the limitation was still unenforceable against him, as it was found to not be necessary or rationally connected to the protection of a proprietary interest. Prohibiting the consultants from performing any consultation work on contracts that involved IT service to the RCMP would not provide protection of a specific proprietary interest of the Applicant. It would simply limit the capacity of competing organizations to hire experienced consultants and successfully bid on RCMP contracts. Such an outcome is very restrictive, and the Court found it to be an unreasonable restraint on trade.

If you have questions or concerns about the implications of a contractual non-competition clause in a work-related agreement, our experienced Ontario employment lawyers will be happy to advise you. Please call 613-567-2901 or email info@ravenlaw.com to request further information. 

In a recent contract case, Callow v Zollinger, 2020 SCC 45, the Supreme Court confirmed that damages can flow from a contractual breach of good faith when one party knowingly misleads the other. Good faith between parties is an unwritten obligation found in contracts. The exact nature of that obligation may vary some, depending on the type of contract. 

Now, the Court has clarified the legal obligation to perform a contract in good faith includes a responsibility to avoid misleading the other party. This may have a significant effect on employment contracts, as employees are entitled to rely on what an employer says it will do, including representations made beyond the precise wording of the contract. 

Contractual Obligations Must be Performed in Good Faith 

Callow v Zollinger involved a contract between a group of condominiums, represented by property manager Mr. Zollinger, and a lawn and winter maintenance company, represented by Mr. Callow. The contract was terminated with ten days’ notice, allowed by the contract’s wording. However, Mr. Zollinger knew the condominiums had decided to terminate the winter maintenance contract months prior, and yet he did not inform Mr. Callow and allowed him to perform extra work during the summer months.

The Court found Mr. Zollinger breached the good faith obligation by failing to disclose that the contract would end before the winter. Mr. Zollinger knew Mr. Callow was completing the extra work because Mr. Callow thought the contract would continue through the winter, as it had in years past. Additionally, because Mr. Callow did not know the contract was ending, he, therefore, could not seek out other winter maintenance work until the last minute which was detrimental to his business. The condominiums benefitted from Mr. Callow’s extra work during the summer months knowing that the work was done on the basis the contract would continue.

There are two main takeaways: (1) misleading actions can attract monetary damages in court and (2) the contract’s specific wording does not end the parties’ obligations—breaches can occur when one party’s actions are misleading, even if allowed within the wording of the contract.

What Does the Duty of Good Faith Mean for Employment Cases?

Courts have consistently recognized that employers have unique power and control over their employees, particularly compared to other contractual relationships. The employer’s higher degree of control over employees requires a higher degree of honesty. 

Courts have already imposed good faith obligations specifically on employers, such as the requirement to act in good faith when dismissing employees. When terminating an employee, employers must avoid “being untruthful, misleading or unduly insensitive” and instead be “candid, reasonable, honest, and forthright.” 

Given the reasoning in Callow, the Court seems to expand this responsibility by holding there is a contractual responsibility to correct the other party’s mistaken impressions and avoid knowingly misleading statements or lying by omission.

In the employment context, an employer’s misleading statements or promises could be detrimental to employees in a wide variety of situations including pay increases, promotions, scheduling changes, the choice of whether and how to provide work, and term contract renewal. Additionally, independent contractors can expect greater protections after Callow, even though they do not have employee status, since the duty of honest performance applies to all contracts.

If your employer misled you or lied to you about your employment conditions, even if they followed their obligations as written under the contract, an employment lawyer can advise you about whether your employer breached their contractual obligation of good faith, giving rise to a claim for damages.