Cases

SCC Case Information

Summary

34662

Yannick Payette, et al. v. Guay inc.

(Quebec) (Civil) (By Leave)

Keywords

Sale.

Summary

Case summaries are prepared by the Office of the Registrar of the Supreme Court of Canada (Law Branch) for information purposes only.

Sale Sale of businesses and accessory contract of employment Non competition and non solicitation clause Sale of assets of crane rental companies coupled with contract of employment Clauses in restraint of trade given in consideration of sale Accessory employment extended and employee later dismissed Whether Court of Appeal erred in denying appellant Payette protection conferred by art. 2095 of Civil Code of Québec In alternative, whether Court of Appeal erred in finding stipulations of non competition and non solicitation in clauses 10.1 and 10.2 of contract reasonable.

The assets of companies controlled by the appellant Mr. Payette were purchased by the respondent Guay inc. in October 2004. All of those companies worked in the same field, namely crane rental. The contract of sale provided that Mr. Payette would remain employed by Guay and be bound by a non competition clause and companion non solicitation clause for a period of five years after the termination of the employment relationship. The company dismissed Mr. Payette in August 2009; in March 2010, he began working for the appellant Mammoet, a competitor. Guay applied for an injunction; pending the trial, Guay was granted a provisional injunction and a safeguard order. The Superior Court found that the dismissal was wrongful and refused to apply the non competition clause, which it also found too broad to be valid. That decision was reversed by a majority of the Court of Appeal.