Canadian Employment Law Today

Have a question for our experts? Email Jeffrey.R.Smith@thomsonreuters.com with Stuart Rudner Ask an Expert RUDNER MacDONALD TORONTO 2 | March 1, 2017 Canadian HR Reporter, a Thomson Reuters business 2017 Employees required to take laptops home Question: Can an employer require all employees to take their laptop computers home with them every day so they always have access to their work in case they're unable to come in? Limits on non-compete agreements Question: Are there recognized limits to geographic areas and time periods that can be specified in non-compete agreements to keep such agreements reasonable and enforceable? Answer: ere are no "hard and fast" rules with respect to duration and geographic scope which will automatically render a re- strictive covenant enforceable. Employers need to remember that these restrictions will only be enforceable where there is a le- gitimate business interest to be protected, and the terms and scope are reasonable. Employers must keep in mind that as a starting point, non-competition provisions are prima facie unenforceable. ey will only be enforced where lesser restrictions, such as non-solicitation covenants, will not adequately protect the employer — such as where clients follow the former employee, even if she does not solicit them. Even if a court is prepared to accept that a non-competition covenant is reasonably necessary, the terms of the covenant will have to be reasonable as well or it will not be enforceable. e primary terms to consider will be the time during which the individual is restricted, the geographic scope, and the na- ture of the business activities covered. Courts will assess these terms to ensure that they are the least restrictive covenants necessary. ere will be cases where long-term or geographically broad non-competition pro- visions will be enforceable, so long as the employer is able to rationally connect the restrictions to a legitimate business interest. For example, in a recent decision out of Brit- ish Columbia, IRIS e Visual Group Western Canada Inc. v. Park, the court had to assess the scope of a non-competition agreement between the employer and its former employ- ee, Dr. Park. e employer sued Dr. Park after she opened a competing optometry practice in breach of a non-competition provision which prohibited Dr. Park from competing with the employer within five kilometres of its location for a period of three years. e court found that both the temporal and geographic restrictions of the non- competition provision were reasonable. e employer was able to provide evidence that the restriction of three years was rationally connected to the length of time required to recruit and train a new optometrist. Simi- larly, the court found that the employer had a legitimate interest in protecting its client base around its location, and that the five- kilometre restriction did not "go beyond what (was) necessary" to do so. However, the court struck down the non-competition provision, finding that the scope of activities prohibited was far too broad. When drafting a non-competition clause, an employer should always consider whether it can demonstrate that its interests cannot be sufficiently protected by a less restrictive clause, such as a non-solicitation covenant. If it could be, then a non-solicitation clause should be used instead. Practically speaking, it is prudent to include both, so that the non- solicitation clause will be in place if the non- competition clause is struck out. Ultimately, courts will not "fix" restric- tive covenants that are overly ambitious or restrictive. We routinely advise our corpo- rate clients that if they ask for too much, they will get nothing — for example, if a clause restricts the individual for two years, and a court deems six months to be appropriate, they will not reduce it to six months. Rather, the clause will be struck out in its entirety. As the Rolling Stones said, "you can't always get what you want, but you get what you need." For more information see: • IRIS e Visual Group Western Canada Inc. v. Park, 2016 CarswellBC 3115 (B.C. S.C.). Stuart Rudner is a founding partner of Rudner MacDonald LLP, a Toronto-based employment law firm. He is the author of You're Fired: Just Cause for Dismissal in Canada, published by Carswell, a omson Reuters business. He can be reached at srud- ner@rudnermacdonald.com. is article was co-written by Brittany Taylor, an associ- ate with Rudner MacDonald. Brittany can be reached at btaylor@rudnermacdonald.com. Answer: It is now commonplace for em- ployees to have access to their work email on smartphones and other devices, allowing them to be "connected at all times." While these devices make it convenient for em- ployees to work almost anywhere, it can be difficult to set boundaries regarding when the workday truly ends. e same concerns arise when asking an employee to bring oth- er work devices home with them, such as a laptop. Asking an employee to take her work laptop home each day is not, in itself, prob- lematic. However, employers must be very careful to clearly define their expectations, particularly regarding availability to work outside of regular hours, or they may be exposing themselves to significant legal li- ability and additional costs. For example, the Ontario Employment Standards Act, 2000 (ESA) stipulates that any employee who is not a manager, supervisor or other exempt position is entitled to overtime pay for hours worked in a week that exceed 44 hours. If an employee is continuing to work outside of regular hours, she may quickly become en- titled to significant amounts of overtime pay. In this case, an employer may have no way to track the overtime hours being worked by the employee. If the employee subsequently makes a claim for overtime, the employer would have little or no ability to refute the al- legations (though email records can be quite helpful in this context). Additionally, an employee who is consis- tently working in the evenings or on week- ends may not be getting the required hours free from work, and may be working well in excess of the daily or weekly limits estab- lished by employment standards legislation. When employees do not have proper rest periods between workdays or at the end of a work week, they are more likely to become overwhelmed or drained. Furthermore, the stress and pressure of having to be available constantly can have a significant negative impact on an employee's emotional, mental and physical health and, in the worst case, give rise to claims of harassment or a toxic work environment. To combat these risks, employers, espe- cially those who want employees to have ac- cess to devices and laptops outside of regular working hours, should have workplace poli- cies in place which clearly set out limits and expectations with respect to working out- side of regular hours, or away from the work- place. And, of course, they should ensure that all managers are aware of the policy; a policy which says that employees are not to check email after 6:00 p.m. is meaningless if a supervisor routinely emails subordinates in the evening and expects a response.

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