Non-competition agreements

By Lucas Corwin
|Canadian HR Reporter|Last Updated: 10/10/2002

In the 1930s, Bette Davis entered into a contract with Warner Brothers Pictures Inc. under which she promised to “render her exclusive services as a motion picture and/or legitimate stage actress” to Warner. Much to her later chagrin, the actress also agreed not to render any services to any other person without Warner’s prior written consent. The contract also stated that if Davis refused or neglected to perform services for Warner, the company could extend her contract and all of its provisions for as long as she continued to refuse. The practical effect of this provision was to bind Davis to Warner Brothers for the rest of her life.

When she eventually declined to be bound by her agreement with Warner and left America to work in the U.K., that’s when the fireworks really started. A British court eventually reached a “compromise” shortening the duration of the restrictions.

The use of non-competition agreements in employment relationships was controversial long before Davis and Warner Brothers butted heads, and they remain controversial to this day. Nonetheless, they remain widely used. They are common in industries such as health services, where dentists or doctors who practice together often sign agreements restricting where they can practice when their association ends.