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I am an IT instructor in a private educational institution in British Columbia, Canada. They gave me a agreement which includes a section “non-competition clause” with these lines:

He or she agrees that they will not, either directly or indirectly, either as a partner or as an officer, director, shareholder, employee or agent or servant of any corporation or partnership, for a period of two (2) years after leaving the said employment, solicit orders from any customers, clients or agents of the employer for such products as are sold by the employer in any area of the world.

Is it a bond for 2 years for that institution? If I signed, will I have to work for 2 years with them? If I signed and later leave the institution and join another one, will this clause cause problems for me?

  • What jurisdiction? Some places have restrictions on non-compete clauses for employees. Also, are you a contractor or an employee of the educational institution? – Dave D Jan 14 at 19:21
  • I am an employee for part time – Bella Jones Jan 14 at 19:23
  • In British Columbia Canada – Bella Jones Jan 14 at 19:27
  • This particular clause does not require you to work 2 years for the institution. It means that the clause covers 2 years after you stop working for them. – mkennedy Jan 14 at 21:39
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Some jurisdictions tend to favor non-compete agreements, others hold most of them to be unenforceable. From a very quick search, BC is a little reluctant to enforce them, but they can be valid if sensibly drawn.

However, the text you included in the question is not a non-compete agreement at all, it is a non-solicitation agreement, a much less restrictive agreement, which is significantly more likely to be upheld.

  1. The agreement quoted in the question does not mandate the employee continuing to work for the employer for any minimum time, not two years, and not six months. (Another provision might specify a required notice period, but that was not quoted and may not be in the agreement.)

  2. The agreement quoted does not prohibit the employee, after s/he leaves the job, from working for a competitor of the former employer, not even for a brief period.

  3. What the agreement quoted does do, is prohibit the employee from asking individuals and businesses who were customers of the former employer for orders for the same products as are sold by the former employer. This applies to orders on behalf of the employee personally, on behalf of a new employer, or on behalf of a business in which the employee has some sort of ownership stake (such as partner or shareholder). That is all that the quoted language prohibits.

This means that the employee cannot ask those who were customers of the old employer, to buy from or through him, the same products that the old employer sells. It does not mean that the former employee cannot sell such products, if the inquiry comes from the customer.

This sort of agreement is primarily aimed at preventing a salesperson from taking a client list with him or her to a new employer, and trying to get them to move their business from the salesperson's old employer to his or her new employer or business. If the employee is primarily an instructor and does not also act as a salesperson, this agreement will have almost no effect on him or her.

This site discusses such agreement an myths about them in BC, Canada. It says:

Non-competition clauses can be enforced by courts in BC. It is true that employers face an uphill battle in getting a judge to agree to enforce a non-compete, but it can and does happen. If you are wondering whether your non-compete will stick, ask an employment lawyer. Enforceability of a non-compete depends on the specifics of the wording of the clause itself and the overall employment contract. Some key considerations are whether the clause is clearly worded, and whether it is limited in time, geography and scope of what is covered.

If a non-competition clause is enforced by a judge, it will only be applied to prevent the employee from the specific activities listed. If the employer has missed something from the clause, or there is a “loop-hole,” that is generally fair game.

Many contracts include non-solicitation (aka non-solicit) clauses, which are meant to prevent the employee from contacting clients. Non-solicitation clauses are still an uphill battle to enforce, but slightly easier than a non-competition clauses. This is because non-solicits don’t dictate where an employee can work, just what business they can seek out. Even if there is no contract, obligations to respect confidential information, and fiduciary duties (in the case of key employees) last beyond the end of employment and can limit competition.

An online paper on "Is my Employee’s Non-Compete Agreement Enforceable?" by Lisa Stam says:

In Canada, courts have generally been reluctant to uphold agreements that have the effect of restricting an individual’s ability to earn a living or pursue the job of their choice. Indeed, courts take the initial position that restrictive covenants in employment agreements are unenforceable, unless the employer can demonstrate otherwise. A restrictive covenant must jump through several hoops to be deemed enforceable.

...

A non-solicitation agreement will allow a former employee to work for a competitor, but prevent them from soliciting the clients (and possibly the employees) of their former employer for a specific period of time. Former employees may have close relationships with clients. Allowing them to solicit these clients may give them an unfair advantage against the former employer in the marketplace. If the employee does not solicit the client, but the client leaves to follow them anyway, there is little an employer can do.

...

If a court finds a restrictive covenant clause unreasonable, for example it restricts solicitation for 12 months when 6 would have been reasonable, they will not read it down to fix it. Canadian courts require the employer to get it right the first time and a flawed clause will therefore normally be unenforceable.

In short, the above quoted agreement may not be enforceable. But if it is, it only restricts solicitation, not competition, and does not require the employee to work for the employer for a period of two years, or any other minimum time.

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If I signed and later leave the institution and join another one, will this clause cause problem for me?

It is not possible to give a precise yes|no answer because the language of that clause is so restrictive that it might be wholly or partially stricken as unreasonable (but I personally would not sign that clause).

For instance, if your involvement with that institution only would be in the capacity of instructor (that is, with no exposure to sales or business decision making), the company has little-to-no grounds for prohibiting you to be a shareholder (especially a passive investor) elsewhere in the education industry upon termination of your employment at that company.

Moreover, if the company's worldwide market share is significant and/or involves intermediaries, the clause might be excessively restraining your instructor career once your employment there is ended.

The fact that you are a part-time employee further weakens the company's merit in imposing on you an overly restrictive condition. As a part-time employee, it is reasonable and most likely that you take (or need to take) side jobs to make ends meet. Chances are that those side jobs would have to be about IT education because that is the field where you are developing & applying your expertise.

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    Read the clause carefully - it doesn’t prohibit holding any of those roles, it just prohibits soliciting orders from the ex-employer’s customers - a quite reasonable restriction. – Dale M Jan 14 at 22:30
  • @DaleM The tricky word is the term "indirectly", which opens the door for the institution to allege an entitlement to ascertain (via discovery) whether the OP as an officer/director/shareholder/etc. of a competitor ultimately (or indirectly through agents or third parties) engaged in the forbidden solicitation. – Iñaki Viggers Jan 14 at 23:39
  • @InakiViggers That sounds like quite a stretch to me, and it would not prevent others in the organization from making solicitations, provided that this was not done (tacitly or otherwise) with the help of the person bound by the agreement. Also take into account that the the OP's role is "IT instructor" - not something that requires solicitation of business. – davidgo Jan 16 at 4:32
  • @davidgo "it would not prevent others in the organization from making solicitations" I did not suggest that. I clarified that the clause opens the door for the company to scrutinize via discovery [in court proceedings] the OP's subsequent interests (that is, in her subsequent business) to ascertain whether she indirectly prompted those solicitations. This clause tends to create a mess out of the M-to-N educational reality that nowadays the average person takes various courses at different institutions. – Iñaki Viggers Jan 16 at 12:18

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