Canadian (Alberta) noncompete clause too ambiguous?

This is a discussion on Canadian (Alberta) noncompete clause too ambiguous? within the Other Labor Law Matters forum, part of the LABOR & EMPLOYMENT LAW category; If I may be so bold as to inquire on the validity of an employment contract's "Non-competition" clause. We're located ...

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Old Jul 9th, 2009, 11:54 AM   #1
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Default Canadian (Alberta) noncompete clause too ambiguous?

If I may be so bold as to inquire on the validity of an employment contract's "Non-competition" clause. We're located in Alberta, Canada.

To be concise the wording written in the "contract" states; (I've written this letter for letter with the exception of the company name)

XII Conditions of Employment
- Employee acknowledges that process and materials used by *former employer* are proprietary to *former employer*, and the employee speciafically promises not to reveal and formulations or trade secrets of *former employer* either during his employment or subsequent to his employment. The employee further acknowledges that
- *former employer* may obtain an injunction against the employee for so revealing any such trade secrets. Employee will conduct him or herself in a professional manner at all times such that his or her conduct reflects favorably upon *former employer*.
- Employee will not involve him or herself in any way directly or indirectly with any business competitive to the business operated by *former employer* during his or her time of employment with *former employer*, for a period of five years thereafter
- The *former employer* Training Manual is copyrighted. Employee promises not to disclose the content of this manual. It is considered proprietary.

Our main area of concern is mainly with paragraph three. Without a specific geographic region or boundary stated or the unreasonable timeline quoted, is this a valid non-competition contract if I decide to start a similar company using an entirely different equipment and processes than *former employer*? The company in question touches up rock chips in vehicle paint. We wouldn't be using a formulation, process or product that remotely resembles anything to do with our former employer.

Just needed to know if this is valid and legal? I only ask as the owner here in Alberta is threatening action if we decide to go into business for ourselves "touching up cars". I've
searched the internet seeking a relevant answer and it would seem to us that there is no validity judging by the way the contract was worded. Our company certainly wouldn't be putting our former employer/company out of business as they are a franchise. In other
words we are by no means a viable threat to their livelihood.

We were only curious if their Non-compete clause was valid. The way I read it, it was too ambiguous with regard to geographic location and time from was more than unreasonable.

I wasn't too concerned about us going to court as our former employer has done so many other things to violate the Alberta Labour Standards code. Any fears any former employee would have would be more than unfounded.

Again, I have no fears about anything proceeding to the legal level. We only recently left their employ on Monday. Our company we're developing has no proprietary processes or information from our former employer in use. We are not intending to or willing to mimic their
methods.

We feel there would be no need to require any legal entity to be put on retainer at this time, only clarification of the validity of the aforementioned "Conditions of Employment". That and with our just getting our own company up and running, finances for lawyers at this time is extremely unlikely.
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Old Jul 9th, 2009, 11:59 AM   #2
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Default Re: Canadian (Alberta) noncompete clause too ambiguous?

The same day we gave our notice of resignation, we were informed that we weren't required to return to work again. The next day they wanted us to sign a "new" non-compete agreement. Again, after we were told that we need not return, dated a day after we gave notice.

It should also be noted that we have zero interest in soliciting our former customers for contract work, nor is it our intent to convince other former co-workers to come and work for us. If we contact former customers, it's solely to inform them that we no longer work for our former employer.

Last edited by john_p_davis; Jul 9th, 2009 at 12:21 PM.
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Old Jul 12th, 2009, 07:48 PM   #3
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Default Re: Canadian (Alberta) noncompete clause too ambiguous?

You should also have a lawyer review the details, perhaps even have a lawyer on world law's home page from Canada assist but frankly that is too broad and too restrictive to be enforceable from what I see.

I work in the HR Dept of a large Canadian firm and we deal with this issue often.
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