A non-solicitation clause is generally inserted into an employment contract for the purpose of protecting the interests of the employer by prohibiting its employees from soliciting the company\u2019s clients or encouraging other employees to leave the company. But can such a clause prohibit the referral of an employee to a third party? The current jurisprudence indicates that it can.<\/p>\n
The Maibec inc.<\/em> c. Martineau<\/em>[1]<\/span><\/a> ruling confirms the validity of a clause prohibiting an ex-employee of a company, for a term of two years from the date of termination of his or her employment, from soliciting another employee of the company (which includes referring such employee to a third party). In this instance, the clause which came under review by the Court reads as follows (our translation)<\/u>:<\/p>\n \u201cDuring the term of his(her) employment and for a period of twenty-four (24) months thereafter, the employee may not, directly or indirectly, for itself or on behalf of another person<\/u> (\u2026) encourage, in any manner whatsoever<\/u>, any employee to leave his(her) employment with the company.\u201d[2]<\/span><\/a><\/p>\n As to whether such a clause is valid, the Court states (our translation)<\/u>:<\/p>\n \u201c[33] Generally, according to the literature, the legality of any restrictive clause in employment matters, whether it relates to non-competition or non-solicitation of clients or ex-employees, must be assessed in relation to its duration, its territorial limits and the nature of the applicable activities\u00a0:<\/p>\n 10.2.1 Although Qu\u00e9bec courts examine each clause in the particular context to which it applies, the Qu\u00e9bec case-law has analyzed the validity of restrictive clauses contained in an individual employment contract by evaluating their reasonableness in relation to three essential criteria: 1) the duration of the restriction, 2) the territorial limits of the restriction, and 3) the nature of the activities which are subject to the restriction.\u201d<\/p>\n [\u2026]<\/p>\n \u201c[36] However, the reasonableness of a restrictive clause relating to non-solicitation requires a less rigorous review than a non-competition clause:<\/p>\n 10.2.120 With respect to non-solicitation clauses, the courts tend to mitigate their review on the basis that the protections sought by the employer are more limited than in the case of the application of a non-competition clause.<\/p>\n [37] And the interpretation of a non-solicitation clause will also differ according to whether it applies to the clients or to the employees of the ex-employer, given that a client, as opposed to an employee, generally is not committed to the company and is free to do business with whomever it wishes. The employee, being subject to the legal conditions of his(her) employment relationship, does not have as much freedom:<\/p>\n [\u2026]<\/p>\n [\u2026] In any event, it should be noted that the courts assess the reasonableness of non-solicitation clauses more broadly since the scope of the required protection is more limited than in the case of true non-competition clauses.<\/p>\n [38] At this stage of the analysis, we must conclude that the employee\u2019s non-solicitation undertaking under the P-1 Agreement is reasonable in view of the nature of the protection it affords since its purpose is to safeguard the plaintiff against the poaching of its employees in the context, namely, of mass resignations.<\/strong>\u201d<\/p>\n As to the \u201cduration of the restriction\u201d criterion, the Court also finds it to be valid (our translation)<\/u>:<\/p>\n \u201c[39] The 24-month period stipulated in the Agreement signed by Mr. Martineau is in conformity with the jurisprudence and literature and is therefore acceptable:<\/p>\n We believe the duration of non-solicitation clauses can be summarily examined as the principles are somewhat similar to those applicable to non-competition clauses, subject to a simple difference. Since the non-solicitation clause is much less restrictive for the ex-executive, and the clients being free to choose, judges tend to be more flexible when determining its validity. As such, the author should avoid drafting clauses that exceed 24 months and should take care, when exceeding this threshold, to ensure that the context, \u201cnamely, the company\u2019s specific nature, the importance of the employee\u2019s duties or the fact that it is a key employee of the organization\u201d, justifies such longer period.\u201d<\/p>\n In summary, we note that the court confirms the validity of such non-solicitation clause (our translation)<\/u>:<\/p>\n \u201c[42] We conclude that the defendant is bound by the non-solicitation clause contained in the agreement he has signed as the plaintiff has clearly demonstrated that it is reasonable and perfectly legal\u201d[3]<\/a><\/span>.<\/p>\n Moreover, it should be noted that, as opposed to the non-competition clause, the non-solicitation clause does not need to be limited geographically (our translation)<\/u>:<\/p>\n \u201cFirstly, the non-solicitation clause will not need to be limited geographically. As demonstrated in the recent Gagnon c St-Pierre<\/em> decision, the Qu\u00e9bec courts generally acknowledge the validity of a non-solicitation clause that does not stipulate a territory[4]<\/a><\/span>\u00a0\u00bb[5]<\/a><\/span>.<\/p>\n [\u2026]<\/p>\n \u201cRecently, the Supreme Court appears to have definitely settled the question by confirming that non-solicitation clauses did not need to provide a territory to be valid\u201d[6]<\/a> <\/span>[7]<\/span><\/a>.<\/p>\n In essence, a non-solicitation clause can effectively prohibit the referral of an employee to a third party. It is therefore important for any employee to fully understand the scope of the clause that appears in his(her) employment contract and for any employer to obtain all relevant information pertaining to the potential existence and the scope of any non-solicitation of new employees undertaking by which its current employees may be bound.<\/p>\n By Audrey Robitaille<\/a><\/span><\/span><\/p>\n [1]<\/span><\/a> Maibec inc.<\/em> c. Martineau,<\/em> 2014 QCCQ\u00a0861.<\/p>\n [2]<\/span><\/a> Maibec inc.<\/em> c. Martineau<\/em>, pr\u00e9c., note 1 par. 4<\/p>\n [3]<\/a><\/span> Maibec inc.<\/em> c. Martineau<\/em>, pr\u00e9c., note 1 par. 40.<\/p>\n [4]<\/span><\/a> Plusieurs autres d\u00e9cisions sont au m\u00eame effet. Voir \u00e0 cet \u00e9gard Personnel Marie-Andr\u00e9e Laforce (2000) inc c Laforce<\/em>, DTE 2004-848 (CS); World Wide Chemicals inc c Bolduc et Desruisseaux<\/em>, DTE 92T-299; Centre des Orchestres du Qu\u00e9bec Alex Drolet lt\u00e9e c Turgeon<\/em>, JE 86-31 (CS) [Centre des orchestres<\/em>].<\/p>\n [5]<\/a><\/span> RENNO, Karim, \u00ab\u00a0La clause de non-sollicitation est morte, longue vie \u00e0 la clause de non-sollicitation?\u2019\u00a0\u00bb.<\/p>\n [6]<\/a><\/span> Payette c Guay inc<\/em>, 2013 CSC 45.<\/p>\n