The refusal to sign a non-competition clause during employment is not a good and sufficient cause for dismissal
On February 3rd, 2012, the Court of Appeal reversed a decision of the Commission des relations du travail (C.R.T.) and accepted the complaint for dismissal not made for good and sufficient cause, filed by Patrick Jean (the Employee), against his previous employer, Omegachem inc. (the Employer).
In this case, the Employer, a company in the field of organic chemistry hired in 2002, for a fixed period of one year, the Employee, a chemist living in France, for the position of Chief of production and processes.
The letter of employment which was sent by the Employer to the Employee provided that at the time of his arrival, the Employee was to sign a confidentiality and non-competition agreement, mandatory for all the personnel. However, upon his arrival, the Employee only signed a confidentiality agreement and the Employer did not submit any non-competition agreement.
The Employee continued working for the Employer until the expiration of the one year term and it was only in 2005, three years later, that the Employer asked the Employee to sign the non-competition agreement. The Employee consulted with a lawyer and asked to negotiate this agreement and to obtain in exchange a termination pay equivalent to the salary which would be paid to him during the non-competition term.
In 2006, the Employer came back with a new draft of the non-competition agreement. The Employee refused it and in light of the refusal, the Employer dismissed the Employee on April 27, 2007. The Employee filed a complaint for dismissal not made for good and sufficient cause which was rejected by the C.R.T. on the grounds that by refusing to sign the non-competition agreement, the Employee violated an essential term of his contract of employment, which constitutes a good and sufficient cause of dismissal. In judicial review, the Superior Court shared this opinion.
Taking the opposite view, the Court of Appeal reversed the decision of the C.R.T. for the following reasons :
- A non-competition agreement was not presented to the Employee upon his arrival, as provided in the letter of employment;
- The working conditions of the Employee pursuant to the letter of employment were subsequently modified and a new agreement was reached between the parties, which is silent in regards to the non-competition agreement.
- The agreement mentioned in the letter of employment could not constitute a valid obligation because on the one hand, a non-competition clause must be stipulated in writing and in express terms (2089 par. 1 C.c.Q.) and on the other hand, the debtor’s obligation must be determinate or determinable (1373 C.c.Q.);
- The non-competition clause in itself is problematic in terms of its legality with regards to the criteria mentioned in section 2089 par. 2 C.c.Q.