Biting the fiduciary bullet: a case for post-employment restrictive covenants
Post employment restrictions can be tricky to enforce. But if drafted properly, they can be very valuable.
As one Alberta employer recently discovered (in the case of ADM Measurements Ltd. V. Bullet Electric Ltd), relying on implied fiduciary duties to do the job of contractual restrictions can be a pricey gamble.
This case demonstrates the importance of defining the terms of an employment agreement, including post-employment restrictions, explicitly through contract. These may include confidentiality and non-solicitation obligations and, in limited circumstances, non-competition agreements.
Had ADM entered into reasonable and enforceable restrictive covenants with its employees, it may have been able to recover damages when one of its former employees solicited its employees and customers.
Given the limitations to common law fiduciary duties, restrictive covenants provide valuable protection to employers.