Q. What legal interest does employer maintain in employee's personal skills?

A. No proprietary interest in employee’s personal skills.

According to Cheshire & Fifoot, Law of Contract (7th Ed.) Part IV. Ch.VI at p.347:

It has already been seen that a restraint imposed upon a servant is never reasonable, unless there is some proprietary interest owned by the master which requires protection. The only matters in respect to which he can be said to possess such an interest are his trade secrets, if any, and his business connection.

According to Ian Martin Associates Ltd. v. Reale, [1971] O.J. No. 308 (Ont. High Ct.):

In addition, the defendant was a young junior salesman among numerous salesmen employed by the plaintiff. His contacts were thus distinctly limited and there was no evidence that he had acquired any influence over the plaintiff's clients. Much stress was laid in this connection on the acquired knowledge of the precise individual to deal with among the executive personnel of any particular client. This argument seems naive to me since the factors which would bring about a business contract between a service company like the plaintiff's and a client are constantly changing. To be successful, the defendant must, in the end result, employ his own skill and personality to the fullest extent, and the plaintiff has no proprietary interest in these characteristics.There are numerous cases where business connection with customers and clients has been protected but when one examines them, one finds that in virtually every case the employee has been the sole representative of the employer in an area distant from the employer's principal place of business and, hence, to all intents and purposes in the eyes of the public and the employer's customers, is the person providing the service or goods.

In Drake International Ltd. v. Miller et al., 9 O.R. (3d) 652, the plaintiff company carried on an employment agency business and sought to restrain a former employee from competing with it and relied upon the non-competition covenant contained in its contract of employment with the defendant Miller. Mr. Justice Grange concluded that the restrictive covenant ought not to be enforced and that it was not necessary for the protection of a legitimate interest of Drake International. Page 660 states:

As I see the problem, we must examine carefully the facts of the business to determine whether the nature of the employment produces the conditions precedent in the validity of a covenant in restraint of competition by the employee and whether a Court would deem such a covenant therefore reasonable in the circumstances. This examination is very difficult upon an application in Weekly Court where normally only affidavit evidence is offered. After giving the matter the most careful consideration, and not without a great deal of doubt, I have reached the conclusion that the nature of the business with which we are here concerned is closer to the estate agent business depicted in Bowler v. Lovegrove, supra, than it is to the catering business in the Jiffy Foods case. I say that for the following reasons:

a) I can find no evidence of any real "trade secrets" in the operation of the business;

b) there is the widest latitude in the trade in the obtaining of custom. The agents canvass businesses regularly without restraint; they search out the advertisements placed by businesses for employees; they realize that they are in a competitive market where the only criterion for further employment is results;

c) there is no physical or geographic benefit to the solicitation of business. Any agency is restricted only by the cost of the long distance telephone or on rare occasions by the inconvenience of personal interviews at some distance from their own location;

d) every agency realizes and appreciates that the businesses with which they deal and the job applicants who seek the positions with those businesses are perfectly free to, and very often do, consult other agencies simultaneously.

It follows that I have concluded that the plaintiff, upon whom the burden lies, has not satisfied me that the covenant it exacted from the defendant was necessary for the protection of a legitimate interest.


In Gerrard v. Century 21 Armour Real Estate Inc., Feldman J. considered the application by the plaintiff for an interlocutory injunction to compel its former sales manager to comply with her covenant that, for one year following termination, she would not provide the same services for a competitor within a proscribed area, would not solicit or encourage other employees to leave, and would not agree to a business association with any individual who was employed by the plaintiff. Feldman J. held that the covenants were likely to be found to be unreasonable based on the broad definition of client and the apparent objective of prohibiting competition generally rather than as protection of the plaintiff's interest in its customers.

In Robbins & Myers Canada Ltd. v. Washington, [1993] O.J. No. 1264, Belleghem J. refused to grant an interlocutory injunction. The employed sales representative had covenanted that, for a period of two years after termination of employment, he would not engage in or represent, directly or indirectly anybody engaged in the sale or solicitation of products which were similar to or competitive with any of the products covered at the time the covenant was given. The court concluded that the covenant was unreasonable because the time frame would have eliminated the defendant as effective competition.

In many cases, employee’s personal, sales, and professional skills are their own and don’t stem from nor dependent on their employer. Therefore, employer has no vulnerable/proprietary interest in need of protection so as to justify restrictive non-compete/non-solicitation terms.