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Non-Compete Clause Quiz

Is a Non-Compete Clause Enforceable?

SITUATION

A foreign exchange broker signs a contract with a brokerage firm that includes a promise not to engage in any competitive business anywhere in Canada for 18 months after he leaves the firm. The non-compete also bans him from soliciting the firm’s clients after he’s gone. The firm is headquartered in Edmonton, but does business across the entire country. It relies on its client list and goodwill for continued sales. After working at the firm for a little over four years, the broker resigns and goes to work for a competing firm that has its HQ in Calgary. Although he doesn’t solicit them, a few of his clients follow him to the new firm. The old firm sues the broker for violating the non-compete.

QUESTION

Is the non-compete enforceable?

A. Yes, because it’s a legal document signed by the employee and firm

B. Yes, as long as the agreement is reasonable in scope, duration and geography

C. No, because anti-competes are per se illegal viol...

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