Canadian Employment Law Today

Canadian HR Reporter, a Thomson Reuters business 2016 Canadian Employment Law Today | 11 More Cases Agreement stipulated specific employment terms Kramchynski suggested he do some work for another company — the company for whom his former apprentice was now working — but Prism's director suggested the other company buy Kramchynski's sec- tion of the business or bill him at his usual charge out rate. Kramchynski rejected the suggestions. On March 29, 2012, Kramchynski quit his job at Prism and went to work with the competitor for whom he had suggested he do some work. Prism sued for breach of its non-competi- tion agreement and duty of faith in inducing another employee to leave for a competitor. e court found that the non-competition agreement was agreed to as a fundamental component of the sale of Kramchynski's business to Prism — Prism wouldn't have acquired the business if it couldn't secure Kramchynski's skills and assurance that he wouldn't simply leave to join a competitor. However, the court also found the non- competition agreement was part of Prism's agreement to employ Kramchysnki un- der the collective agreement and couldn't be separated from it. While Prism initially employed Kramchynski under those terms — 40 hours per week with benefits — over time Kramchynski's hours decreased and, as a result, his pay decreased. "While I accept (the Prism director's) evidence that he would not have purchased the business had (Kramchynski) not agreed to work for him and not to compete, I also accept Mr. Kramchynski's evidence that he would not have entered into an agreement to work for (Prism), if he was only to receive part-time work," said the court. "While (Kramchynski) did not insist that he be em- ployed precisely 40 hours a week, in my view, he was entitled to expect to be fully employed in order that he could gain the benefit of the higher rate of pay and health benefit package provided under the collective agreement, as he had been promised." e court found the scope of the non- competition agreement was reasonable and was for the legitimate protection of Prism's business. However, once Prism stopped pro- viding Kramchynski with sufficient work, the non-competition agreement became unenforceable because the sale agreement and its attached employment agreement were essentially breached. e court also found Kramchysnki didn't induce his former apprentice to leave Prism, as Prism's director knew the employee wasn't happy with the way things were go- ing and was looking to leave. e court also noted Prism didn't do much to advertise when things were declining and, as a result, it wasn't surprising some customers left with the former apprentice. e court determined it was Prism who breached the employment agreement, not Kramchynski, and Kramchynski didn't in- duce anyone to leave for the competition or act dishonestly in any way. Prism's breach of contract claim was dismissed. See Powell River Industrial Sheet Metal Contracting Inc. v. Kramchynski, 2016 Car- swellBC 1342 (B.C. S.C.). « from NON-COMPETE on page 1 Contract's fixed term revision takes precedence over earlier reference A BRITISH COLUMBIA company's con- tract with a dismissed employee may have had ambiguous language regarding the con- tract term, but the intention of the parties was clear through their negotiations and re- visions, the B.C. Court of Appeal has ruled. Talius, a producer of retractable screens and shutters based in Salmon Arm, B.C., offered Randall Alsip employment as the company's director of sales on July 23, 2012. e offer stated was for a "full-time and permanent" position. At the time of the of- fer, Alsip was a sales manager for another B.C. company in the consumer packaged goods industry, where he had worked for 30 years. Alsip rejected the initial offer of employ- ment, saying he wanted a higher salary and the inclusion of a term giving him a three- year employment contract, as he was con- cerned about leaving a secure job without job security in his new position. Talius agreed to the changes and revised the employment offer with a higher salary and three-year employment contract with- out changing the initial description of full- time and permanent employment. ere was no discussion of what the three-year contract meant, but Talius believed it meant Alsip's employment would be for a maxi- mum of three years, subject to earlier termi- nation for cause or with reasonable notice. Alsip accepted the offer and Talius drew up an employment contract. e contract set out Alsip's salary, bonus incentives, ben- efits, and expense allowances. e compen- sation package indicated that it included a "three-year employment contract," though the offer letter retained the "full-time and permanent" description. Eight months later, Talius terminated Alsip's employment without cause and pro- vided him pay in lieu of notice. Alsip argued he had a three-year fixed-term contract and sued Alsip for the balance of the term. e B.C. Supreme Court noted that while the contract may have had some apparent ambiguity due to the revision of the employ- ment offer to include reference to a three- year term while maintaining the "full-time and permanent" description, it found that it was clear Alsip and Talius intended to cre- ate a three-year term through their nego- tiations, making the word "permanent" lose significance. After the revisions the mean- ing was that the employment would be full- time until it was concluded for at least three years, said the trial court. Due to the clarity on the intention of the parties to the contract, the trial court found no need to determine which reference in the contract — "full-time and permanent" or the three-year term — took precedence. e trial court found that by the end of their negotiations, Alsip and Talius clearly intended to create a three-year fixed-term contract. Talius was ordered to pay Alsip damages for the balance of the contract, mi- nus what he had earned in replacement em- ployment had found — $141,500. Talius appealed the decision, claiming the trial court didn' t consider the fact Alsip wanted a contract similar to that of his previ- ous position, which didn't have a fixed term, as well as Alsip's unfamiliarity with Talius' business. e B.C. Court of Appeal upheld the trial court's decision, finding there was no need to consider every fact in evidence when all that needed to be decided was the intention of Alsip and Talius in creating the employ- ment contract. "ese considerations, all of which are peripheral to the ascertainment of the inten- tion of the parties, cannot obscure this sim- ple fact — Mr. Alsip insisted on the inclusion of a three-year employment contract term and (Talius) accommodated that request in the redraft," said the Court of Appeal. "In these circumstances, it was open to the trial judge to conclude that the parties clearly intended to create a fixed-term, three-year employment contract." e appeal court dismissed Talius' appeal. See Alsip v. Top Rollshutters Inc., 2016 Car- swellBC 1659 (B.C. C.A.).

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