Bassman v. Deloitte, Haskins & Sells of Canada
Non-Competition Clause in Partnership Agreement Found Unenforceable
Summary
A case involving the enforceability of a non-competition clause in a partnership agreement between chartered accountants. The plaintiff resigned and began competing with the firm, leading to a dispute over whether the clause was an unreasonable restraint of trade. The court found the clause unenforceable due to overbreadth and lack of necessity, and determined that the liquidated damages provision constituted a penalty.
Outcome
The non-competition clause was deemed unenforceable, and the liquidated damages provision was found to be a penalty.
Award
The liquidated damages provision was found to be unenforceable as a penalty, and the non-competition clause was deemed unenforceable due to overbreadth.
Key Factors
- non-competition clause
- restrictive covenants
- reasonableness
- unenforceable penalty
- partnership agreement
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This is legal information, not legal advice. Ontario Severance is an educational tool. If you are facing a serious employment law matter, consult with a qualified employment lawyer in Ontario.