A non-competition clause between a rock-climbing instructor and his ex-employer is unenforceable, an Ontario court has ruled
Chris Mick worked for Boulder City Climbing School from September 2000 to June 2002. Mick and another instructor went to high schools and provided rock-climbing activities to students.
Mick was paid $35,000 in his first year, out of gross revenues of about $670,000. As year two approached, Mick signed a contract for a second year for a salary of $50,000. A clause in the agreement provided that if he was terminated he could not, for 24 months, “be directly or indirectly engaged in any company or firm which is a direct competitor” in Ontario or “be employed by or operate any similar portable climbing business” in the province.
In the second year, David Carter, Boulder City’s owner and sole director, felt Mick wasn’t performing well and took away some of his responsibilities. Mick complained frequently that he wasn’t paid on time.
Mick told the Ontario Superior Court of Justice that as the year went on he came to believe his employment was in jeopardy. He said he’d begun to consider establishing his own company, which would offer climbing to primary schools and clients Boulder City had not sought.
At the end of June, when his vacation was beginning and he realized he would not be re-employed, Mick changed the contact number from his home phone to Carter’s. He sent Carter a letter telling him of company “loose ends” he’d cleared up before leaving. He sent three e-mails to Carter in July, saying he was “really desperate” to be paid.
On July 19 Carter wrote to Mick, saying he was terminated for cause.
In court he testified he’d encouraged Mick to expand the climbing program to primary and middle schools, and said Mick had set up his own rock-climbing business when he should have been working for Boulder City. He argued that, under the non-competition clause, Mick should be prevented from starting his company.
But the court ruled Mick had not been terminated for cause. There were two instances of “inappropriate contact” when Mick was supposed to be working for Carter but ended up gaining clients for his own company. But these contacts were minimal. Mick’s activities did not breach the terms of his employment contract so as to justify termination, ruled the court.
The court also rejected Carter’s claims on the validity of the non-competition agreement. Courts do not generally enforce a non-competition clause if a non-solicitation clause would adequately protect the employer’s interest.
In this case the agreement was too broad and unreasonable. It was to be in force for a period twice as long as the contract itself, said the court.
In addition the court noted that though the employment contract called for bi-weekly payments, Mick had not been paid since June 1. Thus Carter had terminated the employment contract with Mick without just cause. For that reason alone, Carter cannot rely on the non-competition clause of the contract, the court said.
For more information see:
• Mick v. Boulder City Climbing School Inc., 2006 CarswellOnt 3899 (Ont. S.C.J.).
Mick was paid $35,000 in his first year, out of gross revenues of about $670,000. As year two approached, Mick signed a contract for a second year for a salary of $50,000. A clause in the agreement provided that if he was terminated he could not, for 24 months, “be directly or indirectly engaged in any company or firm which is a direct competitor” in Ontario or “be employed by or operate any similar portable climbing business” in the province.
In the second year, David Carter, Boulder City’s owner and sole director, felt Mick wasn’t performing well and took away some of his responsibilities. Mick complained frequently that he wasn’t paid on time.
Mick told the Ontario Superior Court of Justice that as the year went on he came to believe his employment was in jeopardy. He said he’d begun to consider establishing his own company, which would offer climbing to primary schools and clients Boulder City had not sought.
At the end of June, when his vacation was beginning and he realized he would not be re-employed, Mick changed the contact number from his home phone to Carter’s. He sent Carter a letter telling him of company “loose ends” he’d cleared up before leaving. He sent three e-mails to Carter in July, saying he was “really desperate” to be paid.
On July 19 Carter wrote to Mick, saying he was terminated for cause.
In court he testified he’d encouraged Mick to expand the climbing program to primary and middle schools, and said Mick had set up his own rock-climbing business when he should have been working for Boulder City. He argued that, under the non-competition clause, Mick should be prevented from starting his company.
But the court ruled Mick had not been terminated for cause. There were two instances of “inappropriate contact” when Mick was supposed to be working for Carter but ended up gaining clients for his own company. But these contacts were minimal. Mick’s activities did not breach the terms of his employment contract so as to justify termination, ruled the court.
The court also rejected Carter’s claims on the validity of the non-competition agreement. Courts do not generally enforce a non-competition clause if a non-solicitation clause would adequately protect the employer’s interest.
In this case the agreement was too broad and unreasonable. It was to be in force for a period twice as long as the contract itself, said the court.
In addition the court noted that though the employment contract called for bi-weekly payments, Mick had not been paid since June 1. Thus Carter had terminated the employment contract with Mick without just cause. For that reason alone, Carter cannot rely on the non-competition clause of the contract, the court said.
For more information see:
• Mick v. Boulder City Climbing School Inc., 2006 CarswellOnt 3899 (Ont. S.C.J.).
