Employees are becoming increasingly savvy when it comes to termination clauses – they know to look for clauses that allow the employer to limit the amount of notice given to the employee when the employer terminates the employment relationship. But increasingly, there are also requirements for an employee to give their employer notice when the employee resigns. While these are often nominal (two weeks or one month), in a recent decision, courts have demonstrated that those clauses are enforceable, so employees should be careful to ensure they are aware of what is required of them when resigning.
In BlackBerry Limited v. Marineau-Mes, 2014 ONSC 1790, an Ontario Superior Court judge held a senior employee to the notice required by his employment contract upon his resignation. Mr. Marineau-Mes was a long-time employee of a company bought by Blackberry in 2010. He moved up through the ranks of Blackberry, becoming a Senior Vice-President in early 2013, and then an Executive Vice-President in late 2013. Upon his promotion to Executive Vice-President, Blackberry asked him to sign a contract containing a provision requiring that Mr. Marineau-Mes give Blackberry six months written notice should he wish to resign. Mr. Marineau-Mes was given the opportunity to have the contract reviewed by a lawyer, which he did prior to his signing it in October of 2013.
In September 2013, prior to signing the contract, Mr. Marineau-Mes also began discussions with Apple. As Blackberry underwent increasing difficulties in the late fall of 2013, Mr. Marineau-Mes continued his discussions with Apple and eventually accepted a position. On December 23, 2013, he orally advised Blackberry he would be leaving in two months’ time.
Blackberry took the position that the contract was binding on Mr. Marineau-Mes and sought an injunction preventing him from taking the position at Apple until the end of the notice period on June 23, 2014. Mr. Marineau-Mes argued that if the clause did apply, the proper remedy was damages, and not an injunction. Justice McEwen did not agree, and considered the merits for imposing the injunction.
Mr. Marineau-Mes first attempted to argue that by not having him in active service, Blackberry had terminated his services (with the termination date being his last day of active service). Therefore, because Blackberry had terminated the employment, it was violating the Employment Standards Act, 2000 (“ESA”) by failing to keep his entitlement to vacation pay. Justice McEwen disagreed, stating it was reasonable for Blackberry to require him to be available during the notice period. Mr. Marineau-Mes continued to be paid, and might in fact be called in. Further, the failure to pay vacation pay would not have nullified the entire termination clause, meaning the notice requirement would still stand.
Mr. Marineau-Mes also argued that his promotion to Executive Vice-President occurred during a promotion freeze at Blackberry, meaning he had not officially assumed the role and so the contract did not apply to him. Justice McEwen held that Mr. Marineau-Mes was given a pay increase, and although the announcement by Blackberry of his promotion was delayed (which both parties agreed was for the best), his promotion was confirmed by his superior and approved by the Board. He was an important part of the Blackberry executive team with input in the company’s direction. Therefore, he had assumed the promoted role and the contract applied.
Justice McEwen also rejected the argument that the six month notice requirement was the equivalent of a non-compete. He found that having Mr. Marineau-Mes available was necessary for Blackberry to manage the transition of a senior employee. Further, unlike a non-compete, Mr. Marineau-Mes continued to receive remuneration during that period. Additionally, even had this constituted a non-compete, reasonable non-compete clauses are enforceable and this was neither offensive nor overreaching.
Lastly, Mr. Marineau-Mes tried to argue that Blackberry’s actions had triggered the clause in the agreement which allowed Mr. Marineau-Mes to terminate the employment relationship with no notice if there was material or detrimental alteration of his position, duties, or responsibilities. While he acknowledged this had not occurred prior to his resignation, he stated that by not keeping him in active service after he resigned, Blackberry had detrimentally and materially altered his duties. Justice McEwen rejected this, as the notice provision required Mr. Marineau-Mes to provide services to Blackberry for six months after his notice of resignation, and Blackberry had a legitimate interest in requiring his services after resignation to assist with the transition.
Justice McEwen held that the employment contract was binding on the parties and Mr. Marineau-Mes was obligated to provide six months’ written notice of his resignation. The notice period would expire on June 23, 2014.
This signals that employees should carefully read what is required of them prior to signing employment contracts. This type of clause is one that is easy to ignore, especially at the start of the employment relationship when neither party is thinking about what happens when the relationship ends. If your employment contract has a clause requiring employees to give a certain amount of notice, you should consider the possibility that it is likely enforceable, and plan accordingly.