Do non-competition clauses still have value in employment contracts in the digital age?

In employment context, non-competition clause opposes the employee's right to work and the protection of the employer's legitimate interests.  In Quebec, non-competition clauses in employment contracts are governed by article 2089 of the Civil Code of Quebec.

An review of recent case law indicates that Quebec courts have shown some flexibility in adapting the time limitation and territorial restrictions required by article 2089 C.C.Q. to the digital and technological reality. However, courts remain cautious when considering global territorial restrictions and time limits of more than 12 months.   We although must be careful not to generalize because any such analysis must be done on a case-by-case basis considering the reasonableness between the actual legitimate interests that the employer is trying to protect and the actual impacts on the employee.   It is the employer's responsibility to prove the reasonableness of the non-competition clause and part of this requires demonstrating that there was no other more reasonable means of protection available to it.  A non-competition clause must also not be ambiguous. It must allow the employee to know the extent of his obligations.

In all cases, non-competition clauses in the context of employment are interpreted restrictively and if a non-competition clause is ambiguous or its reasonableness is questionable, it will likely be considered abusive and invalidated by the Quebec courts.

 Reminder

In the United States, the state of California made employment non-compete clauses invalid and contrary to public policy, and the U.S. federal government and several other U.S. states have also passed legislation to further regulate the use of restrictive employment covenants in order to promote mobility and competition.  It is likely that this trend will have an impact on the interpretation of restrictive covenants in Quebec.   Article 2089 C.C.Q. still allows these types of clauses in Quebec, but it is more important than ever for employers to clearly define the protections they need in this regard and not to rely exclusively on non-competition clauses to protect their trade secrets.