Question

Then there is your cousin Simon. Simon recently started work at his dream job as a computer salesman for Nova Computing. Previously he had worked at one of Nova's competitors, namely Apex Computing. When he was hired by Nova, he didn't tell them that he had signed the following clause when he had been hired by Apex Computing two years ago. “I will not carry on, be engaged in, interested in or concerned with a business that competes with Apex Computing in Canada for six months after my employment ends.” He is concerned that he may be fired if Nova Computing finds out. a. Do you think the clause is valid? Explain why or why not. b. Is Nova Computing able to terminate Simon's employment due to the restrictive covenant?

Answer 1

1. Yes, in my opinion the clause is valid since it clearly specifies that Simon shall not join any of the competitors of Apex Computing for six months in Canada after his employment with Apex Computing ends. Since Simon joined Nova Computing within six months of leaving Apex Computing, hence the clause is valid and Nova Computing can fire Simon if they come to know about the clause.

2. Yes, Nova Computing would be able to terminate Simon's employment due to the restrictive covenant because the contract with Apex Computing clearly specifies that Simon won't be able to join any of the competitors of Apex Computing in Canada for six months after leaving Apex Computing. In the event of breach of contract, Apex Computing can sue both Simon and Nova Computing. Hence Nova Computing has all rights to terminate employment of Simon due to restrictive covenant.