PAGE 9

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PAGE 13
IPAD OR PLAYBOOK?

CRISTIN SCHMITZ

An Alberta employer is considering whether to ask the Supreme Court of Canada to review an important ruling handed down last month on the enforceability of non-solicitation and non-competition covenants in employment contracts.

The Alberta Court of Appeal
recently split two to one to dismiss
the appeal of employer Globex
Foreign Exchange Corporation
which had sued (with little success
below) to enforce non-solicitation
and non-competition clauses in
the employment contracts of three
of its former employees. Majority
Justices Constance Hunt and
Peter Martin ruled that the
restrictive covenants—which the
ex-employees had signed either at
the beginning or during the course
of their employment — were
unreasonable and unenforceable
because the covenants were
ambiguous and/or overbroad.

The majority also allowed a cross-appeal by one of the three foreign exchange traders—all of whom had joined a competitor of their former employer after they left Globex.

In their judgment, Justices
Hunt and Martin staked out very
different positions—on two key
legal principles — than that of Jus-
tice Frans Slatter in his dissent.
The majority stated (albeit in obi-
ter dicta) that:
(1) Continued employment
does not, by itself, amount to
valid “consideration” when an
employer demands that an
existing employee sign a new
restrictive covenant; and
( 2) An employee who is wrongly
terminated is thereby relieved
from complying with prospective
restrictive covenants that would
otherwise be binding post-termin-
ation, such as non-solicitation and
non-competition clauses—even
where, as in this case, the employ-
ment contract stipulated that the
restrictive covenants would come
into effect on termination “for
whatever reason.”
Wrote Justice Hunt, “an
employer that wrongfully termin-
ates a contract of employment
should not be able to capitalize on
its failure to give notice or dam-
ages in lieu of notice by enforcing
prospective obligations against an
innocent employee.”
By contrast, Justice Slatter
argued “generally non-competition
covenants will remain enforceable
after termination for breach,
because otherwise they are largely
meaningless. That is the intention
of the parties, which prevails.”
Globex’s counsel, Timothy
Chick of Calgary’s Davis LLP,
told The Lawyers Weekly his
client is still considering whether
to apply for leave to appeal.
Chick suggested that the
Supreme Court could usefully
weigh in, particularly since it hasn’t
commented
since Maguire
v. Northland
Drug Co.,
[1935] S.C.J.
No. 11 on what
amounts to
sufficient con-
sideration for
supplemental
restrictive covenants in the
employment context. Moreover,
the starkly divergent opinions of
the Alberta Court of Appeal’s panel
ultimately rest on important policy
choices, Chick said.
See Covenants Page 27

Chick
THE LAWYERS WEEKLY
Vol. 22, No. 27 NEWS FOR THE LEGAL PROFESSION December 6, 2002
Que. CA reprimands law society
in lawyer’s reinstatement battle THE LAWYERS WEEKLY
Tablet
guide for
lawyers
LUIS MILLAN MONTREAL

In a decisive setback for Quebec’s law society, a renowned Montreal divorce lawyer who was originally disbarred for seven years for professional misconduct was immediately reinstated after a ruling by the Quebec Court of Appeal reaffirmed the appellate powers of an administrative tribunal and clarified the role of the Barreau du Québec’s review committee.

In a unanimous ruling, the appeal court castigated the law society’s review committee for exceeding its mandate and taking on the role of a disciplinary committee while failing to take into account evidence demonstrating that Micheline Parizeau had the aptitude and qualities to be reinstated into the profession.

“The Court of Appeal has put
the review committee on guard,”
noted Alan Stein of Montreal-
based law firm Stein & Stein Inc.,
who teamed up with Montreal
litigator James Woods to repre-
sent Parizeau. “I hope now that it
realizes its powers are restricted
and that they cannot act as a disci-
plinary committee.”
Parizeau, a controversial divorce
lawyer who made a name for her-
self by representing the city’s
moneyed elite, was suspended for
seven years and fined $5,600 after
the Barreau’s disciplinary commit-
tee found her guilty in 2000 of six
professional breaches, including
fabricating evidence, incitement to
perjury and filing of useless docu-
ments to the court. Parizeau
fought back and the Professions
Tribunal reduced her suspension
to five years.

The Professions Tribunal, composed of 11 judges of the Court of Québec, hears appeals from decisions made by the disciplinary committees of Quebec’s 45 professional orders.

In 2005, Parizeau applied for
See Reinstatement Page 7

WASSIM NJEIM FOR THE LAWYERS WEEKLY
Alan Stein successfully argued a reinstatement case for a disbarred lawyer.
THE LAWYERS WEEKLY
VOL. 22, NO. 27 NEWS FOR THE LEGAL PROFESSION DECEMBER 6, 2002
VOL. 22, NO. 27 NEWS FOR THE LEGAL PROFESSION DECEMBER 6, 2002
PAGE 22

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