Are non-compete clauses in employee contracts enforceable in Quebec?

The three axes are conjunctive, and the third is the one templates skip

Time and place are the axes every template limits. Type of employment is the one a clause phrased as prohibiting “any competing activity” silently abandons — that phrasing is not a limitation on type of employment, it is the absence of one. The measure is necessity, not reasonableness: each limit must be confined to what is necessary to protect the employer’s legitimate interests, and the reversed onus removes the practical fallback an overbroad covenant enjoys at common law, where the party attacking it usually carries the running.

A resiliation without a serious reason can remove the covenant entirely

Article 2095 goes further than a reasonableness limit: “An employer may not avail himself of a stipulation of non-competition if he has resiliated the contract without a serious reason or if he has himself given the employee such a reason for resiliating the contract.” This does not narrow an overbroad covenant — it removes it from the employer’s hands altogether. An ordinary restructuring termination, with no cause alleged, is a resiliation without a serious reason and is enough to trigger it, whether or not the employer meant anything strategic by the timing.

Whether art. 2089 even applies depends on what the covenant is accessory to

Article 2089 governs only a covenant genuinely accessory to a contract of employment. A covenant bought as part of the purchase price on a sale, running from the closing date and tracking the business sold rather than the vendor’s job, is governed instead by the sale-covenant rules the Supreme Court set out in Payette v. Guay inc., 2013 SCC 45 — parties negotiating a sale have materially more contractual freedom than parties negotiating an employment contract, and the characterisation turns on substance rather than which document the clause happens to sit in.

Where this played out — Case Files

The three-axis failure decided a covenant silent on the type of employment. The characterisation question — and art. 2095’s effect on it — is worked through in a covenant that had to choose which contract it belonged to.

Sources

• • Civil Code of Québec — art. 2089 the three-axis necessity test and reversed onus; art. 2094–2095 resiliation without a serious reason; art. 2097 continuation of employment on alienation.
• • Payette v. Guay inc., 2013 SCC 45, [2013] 3 S.C.R. 95 — cited, not quoted: sale covenants and employment covenants are governed by different rules, decided by the nature of the principal obligation.
• • Treadstone Law — seller non-compete geographic scope — works through geographic scope as an Ontario common-law question; Quebec’s statutory three-axis test and reversed onus are not covered there.