David Harris - Canadian Employment Law

Restrictive Covenants A recent decision of the Ontario Court of Appeal overturned the trial judgment in favour of Dr.Lyons, a dentist in Windsor of roughly $70,000 and dismissed the claim. Restrictive covenants tend to be common in the dentistry profession. Quite often professionals are governed, however, by an obligation to look after the welfare of the patient, as opposed to individual business interests. Such is the rule in the legal profession. The Court of Appeal threw out the covenant not to compete, signed by Dr. Multari, an associate in practice with the Plaintiff. The court determined that a non solicitation covenant would have been adequate protection to the Plaintiff, Dr. Lyons. The case has significant consequences for those in a comparable professional practice.The lesson to be learned from the Ontario Court of Appeal is to ask for what is legitimately required to protect the business interests of the employer - a fundamental rule of the party seeking enforcement of the covenant. Traditionally such covenants are prime facie void - the burden is on the employer to show why such a restraint on trade should be allowed. Certainly for comparable professional occupations, a non solicitation covenant should be the objective.