Restrictive covenants for independent contractors too broad and vague to apply: Alberta court

As for the conversion fee provision, the court found it to be vague, noting that the clause did not clearly state which breaches of agreement would trigger the fee; This particular article used the singular “term” when referring to a violation, but which term or all of them? Additionally, key terms such as “total actual amount billed” are undefined and leave room for multiple interpretations, the court said, adding that the provision does not specifically eliminate restrictions on payment.

Ambiguous terms

Davis says it’s rare for contracts to go into detail about what damages would occur for breach of restrictive covenants.

“If you’re going to put that kind of specific information into your terms, you need to be absolutely clear about what kind of breach it applies to, whether that’s poaching employees or poaching customers, and you need to make it clear how that’s calculated,” he says. found that the manner of preparation was ambiguous in these respects; if there was any way to interpret it, the courts would interpret it more in favor of the employees (in this case, the independent contractors).

The court disagreed with NL Fisher’s argument that nondisclosure agreements should not be subject to the same scrutiny as if they were an employment relationship, finding that the power imbalance was similar to what would happen if workers were employees rather than independent contractors. The court said the agreements were standard form contracts drawn up by NL Fisher’s legal counsel, which it had several consultants sign, and the workers had no option or option to negotiate terms if they wanted to continue receiving work from the company.

The court emphasized that restrictive covenants Business or contractor agreements must be clear, unambiguous and reasonable to be enforceable; but in this case it wasn’t.