This instalment of You Make the Call features a dispute over when a non-compete agreement started after a worker left to start his own business.
See Thru Window Cleaners is a company providing window, gutter, and pressure cleaning for houses and buildings in Kamloops, B.C. Due to the nature of its business, much of its work was seasonal and as a result it temporarily laid off many workers for a part of each year. The layoffs were around the same time each year and all were considered temporary — See Thru didn’t intend to sever the employment relationship of any laid-off workers, as their employment would resume when the seasonal workload increased.
In 2001 or 2002, the company hired Adam Mahood as an entry-level window cleaner. He worked intermittently for several years and became a seasonal worker and crew foreman in August 2008. In Oct. 2008, Mahood signed a non-competition agreement that was a condition of him becoming a seasonal worker.
Mahood left the company in February 2009 and was rehired one year later. See Thru required him to sign a new non-competition agreement in February 2010 in which Mahood agreed not to establish or attempt to establish his own business relating to window, gutter, or pressure cleaning within the City of Kamloops for a period of three years following the end of his employment with See Thru. The agreement defined the physical boundaries of the area in Kamloops for which it applied.
Mahood continued to work seasonally for See Thru, working from February to November in 2010 and 2011, April to August in 2012, April to December in 2013, and from March to November in both 2014 and 2015.
In November 2015, Mahood went on paternity leave. A couple of months later, on Jan. 14, 2016, he resigned from his employment with See Thru and started a business providing window and gutter cleaning services. See Thru filed for an injunction against Mahood preventing him from operating his new business in the Kamloops area, pursuant to the non-competition agreement. The company argued that the non-competition agreement was in effect for three years after Mahood’s resignation in January 2016.
Mahood countered that when he was laid off each year, he didn’t willingly agree to them and never had a definite return date. He said he was never sure he would be rehired each year, so effectively his employment was terminated with each layoff. As a result, the last non-competition agreement he signed in February 2010 was in effect for three years after his layoff that November, and he didn’t sign any subsequent agreements when he was rehired in other years. As a result, the non-competition agreement expired in November 2013 and there were no limitations on establishing his own window and gutter cleaning business in January 2016, Mahood argued.
You Make the Call
Was Mahood free to establish his own window and gutter-cleaning business in Kamloops?
OR
Was the non-competition agreement still in effect?
If you said Mahood was free to establish his own business and the non-competition agreement had expired, you’re correct. The court noted that while layoffs occurred each season, they were always on See Thru’s terms and Mahood didn’t willingly agree to them. Since it wasn’t a term in the employment contract that was explicitly agreed to by both parties, any layoffs each year that were longer than 13 weeks could be considered a termination under the B.C. Employment Standards Act and an end to Mahood’s employment under the non-compete agreement, said the court.
Mahood was only laid off for December 2010 and January 2011, so that year’s layoff wasn’t 13 weeks long. However, he was laid off from Nov. 11, 2011, to April 30, 2012, a period longer than 13 weeks that therefore qualified as a termination. As a result, the non-compete agreement started to run on Nov. 10, 2011 and would have expired in November 2014, the court said.
The court also found that Mahood was only skilled in the window washing and gutter cleaning business and his seasonal position with See Thru didn’t make him privy to valuable and confidential information. There was no evidence that Mahood’s business would significantly harm See Thru’s business, particularly since there were other competitors in Kamloops as well. As a result, the court determined that the non-compete agreement was too broad to be enforceable anyway, as it wasn’t reasonable to the interests of both parties and the interests of the public.\
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