I want to quit and start up a competing business – can I safely do so? What restrictions am I under for post-employment competitive activity?
Our law favours free competition. Employees can, as a general rule, leave an employer and enter into competition. There are limits, though. The employee must be extremely careful not to take steps to start up the competing business while he or she remains employed. It is acceptable to plan for an prepare the new competitive business while still employed, but not to take any steps to implement the business. It is also not appropriate for any of the planning or preparation work to take place while the employee is supposed to be working for the employer. Activities should not occur on the employer’s premises. Additional limits on competition may arise from special circumstances, such as an enforceable clause in the employment agreement prohibiting competition or solicitation for a period of time after the employee leaves the employer. Reasonably worded restrictions of this sort can effectively rule our competition in some cases. If employees are “key employees” or employees with “fiduciar
