Can The Refusal To Sign A Non-Competition Clause Constitute Just And Sufficient Cause For Dismissal?

Author:Ms Élodie Brunet
Profession:Lavery De Billy
 
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In a recent decision, Jean C. Omegachem Inc.1, The Court Of Appeal Answered That Question By Ruling That An Employee's Refusal To Sign A Non-Competition Agreement During Employment, Which Had Been Discussed When The Employee Was Hired But Presented To Him Three Years After Commencement Of Employment, Is Not A Just And Sufficient Cause For Dismissal. This Judgment Overrules The Two Decisions Rendered By The Commission Des Relations Du Travail2 (Hereinafter "Crt") As Well As The Judgment Rendered By The Superior Court Of Quebec3 In This Case.

THE FACTS

In 2002, Mr. Patrick Jean is hired by Omegachem Inc. (hereinafter "Omegachem"), a company specialized in organic chemistry doing business with the world's leading pharmaceutical corporations.

When hired, Mr. Jean was told that a confidentiality and non-competition protocol, which is mandatory for all employees, would be presented to him. However, when he started employment, Mr. Jean only signs a confidentiality protocol. A non-competition agreement was submitted to him three years later. Initially, this agreement was for a duration of 24 months and applicable to Canada, the United States and Europe. Mr. Jean refuses to sign the agreement and demands in exchange of a severance pay agreement equivalent to the salary which would be paid to him during a period of 24 months. Omegachem puts the projects on hold.

One year and a half later, Omegachem comes back with a new draft for the non-competition agreement. The proposed agreement is now of a duration of 12 months but applicable worldwide. Once again, Mr. Jean refuses to sign this document. Omegachem puts him in default and orders him to sign the agreement, alleging that Mr. Jean's refusal to do so jeopardizes their relationship of trust. Mr. Jean still refuses to sign unless Omegachem accepts to offer him a financial compensation. Omegachem refuses.

Omegachem dismisses Mr. Jean in April 2007. In May, Mr. Jean files a complaint with the Commission des relations du travail in accordance with section 124 of the Act respecting labour standards 4.

The different levels of court were required to answer the following question: does Mr. Jean's refusal to sign the non- competition agreement proposed by Omegachem constitute a just and sufficient cause for dismissal?

THE DECISION OF THE CRT The CRT considers that Mr. Jean accepted the terms of the contract of employment, which provided for the signature of a non-competition agreement as a condition for...

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