Tech company fails to enforce 12-month restriction against project engineer working for competitor
An Alberta court has rejected an employer’s attempt to enforce a sweeping non-competition agreement against a former project engineer, ruling the covenant was too broad, too vague, and went far beyond what was needed to protect the company’s legitimate business interests.
In a decision released October 3, 2025, Justice Marta Burns dismissed the application for an injunction that would have prevented Tom Boguslawski from working for a German competitor developing similar carbon capture technology.
Boguslawski worked as a project engineer at Carbon Engineering ULC from April 2019 to June 2025. When he resigned to join Phlair GmbH, a German company also developing Direct Air Capture (DAC) technology, Carbon Engineering, along with parent companies Occidental Petroleum and OXY USA, sought to enforce a 12-month non-compete clause covering all of North America.
The court found the restriction unreasonable on multiple grounds, dealing a significant blow to employers relying on broadly worded non-competition clauses in employment contracts.
Geography stretched too far
The non-compete prohibited Boguslawski from working for any competing business “within North America” for 12 months after his employment ended. But the court found this geographic scope excessive given the company only operated in British Columbia and Texas.
“Considering the parties’ relative bargaining positions and the fact that the Applicants only operate their business in British Columbia and Texas, a restriction to all of North America is unreasonable,” Justice Burns wrote.
The court noted the covenant covered Mexico, where the companies didn’t operate or have customers.
Even accepting the companies’ argument about limited suitable locations for DAC facilities, the court questioned why the restriction wasn’t limited to those specific areas:“An Alberta, British Columbia, and Texas restriction, for example, may have been reasonable. The entire continent of North America goes well beyond that.”
Ambiguous language proves fatal to non-compete
The covenant prohibited involvement with competitors “in any manner whatsoever”—language the court found impossibly broad and unclear. Would passive investment trigger a breach? What about owning mutual funds holding competitor shares? The court couldn’t say, and that ambiguity proved fatal.
Justice Burns highlighted the undefined phrase “direct competition with the company's business” as particularly problematic. The employment agreement stated Carbon Engineering worked in “direct air capture and fuel synthesis,” yet the company didn't actually operate in fuel synthesis, nor did Boguslawski work in that area.
“This, by definition, would go further than reasonably necessary to restrain Mr. Boguslawski, or at least be ambiguous as he could be prohibited from working in areas of business in which CE does not actually operate, or for which he was not involved with during his employment,” the court found.
The covenant attempted to restrict being involved “in any manner whatsoever” in competitive businesses—language that could capture conduct “far removed from the core” of the company's business, including passive investment.
Power imbalance matters
The court emphasized that Boguslawski was not a senior executive or key employee who might justify extraordinary restrictions. He was a project engineer with three levels of management above him, no client interactions, and no fiduciary duties.
“Mr. Boguslawski was clearly not a key employee with fiduciary obligations,” Justice Burns wrote, noting his salary level and inability to unilaterally exercise power within the organization.
The court applied heightened scrutiny based on the recognized power imbalance in employer-employee relationships, particularly where employees lack bargaining power to negotiate contract terms. Though Boguslawski had acknowledged understanding the non-compete, the court ruled this “cannot, on its own, cure the ambiguity or overbreadth of the restrictive covenant.”
