Wait, is my employment contract valid?

When a new employer hands you a document to sign, it can often feel like just another piece of routine paperwork. However, some of these documents can have a considerable impact on your future, so it is crucial to understand the weight of any termination provisions, non-competition, confidentiality and non-solicitation agreements. 

These documents are intended to protect employers, but they do so by restricting your termination entitlements future employment options. And too often, employers misuse them or fail to ensure they are legally valid. Our courts scrutinize these types of clauses as they are generally seen as a restraint on trade. While seeking advice on the employment agreement before signing is generally wise, not everyone takes this step. There are circumstances under which an agreement is not enforceable.

Scrutinizing the fine print

Before you make any assumptions about complying with or potentially breaching these agreements, it is important to know that certain elements can render them invalid or unenforceable. A common areas that come under legal scrutiny include:

• Lack of consideration: An agreement must offer you something in return for your commitment. One common pitfall is when an employee signs the contract after starting their job. For best practices, an employer should ensure that the new employee signs all new paperwork before starting their job. For existing employees being provided with new paperwork to sign, offer a pay raise or one time signing bonus in exchange for signing the new paperwork. The amount of consideration provided should be proportionate to the changes that the employer seeks to impose on the employee.
• Illegal terms: If any terms of the agreement violate the British Columbia Employment Standards Act or other related legislation, and if there is no severability clause (a clause which severs any illegal or unenforceable part of a contract from the rest of the terms which are still valid), then the contract on the whole may be unenforceable. The parties cannot contract out of the minimum protections afforded under the Act unless you belong to an exempted profession such as an accountant or a lawyer.
• Overly vague or unreasonable restrictions: An agreement that is too broad in scope or time or places undue hardship on the employee may not hold up in court. For example, a non-competition or non-solicitation clause limiting an employee’s ability to do business or join a competing company in the entire province of BC or for a duration of 10 years will not be enforceable.

Each of these points offers a potential avenue for challenging the agreement. But remember, this is a nuanced field, and each situation is unique.

Consider these contracts carefully

As you consider your career trajectory, take the time to revisit any employment agreements you have signed. They can influence your ability to pursue new opportunities post-employment and even affect your leverage in salary negotiations or severance package negotiations if your employment is terminated. Take the time to review your documents, and if anything seems unclear or concerning, it may be worth discussing with a legal professional prior to signing.

Do not overlook the potential impact of these agreements on your professional life. Your career is a journey, and ensuring you have the freedom to navigate it without undue restrictions is paramount. Stay informed, plan ahead, and when in doubt, seek guidance to ensure your career path remains in your hands.