An Employer may require an Employee to sign an Employment Agreement. An Employment Agreement serves multiple purposes namely setting out the terms of employment, in some instances limiting the employer’s liability on termination of an employee to the minimum statutory amounts under the Ontario Employment Standards Act, 2000 or the Canada Labour Code.
As well, an Employment Agreement is also often used to set out non-competition, non-solicitation and confidentiality provisions. The wording of the provisions and/or the circumstances in which the Employee signed the Employment Agreement are critical to the enforceability of provisions.
Even where no Employment Agreement exists, an Employee may have certain obligations to an ex-employer post employment. By virtue of their role in the Company, an employee may have fiduciary obligations that survive the cessation of one’s employment.
A fiduciary’s role in the Company is a position of trust. The fiduciary by virtue of his role in the Company will have knowledge of the intimate details of the business operations and financial information. The fiduciary’s role can also give rise to special relationships with clients/customers which could render him a threat to the Company if he were to leave. If an individual is found to be a fiduciary at law, the law will impose certain restrictions on the individual post-employment even where there is no employment contract.