Non-Competition Clause

[raffeyd]

I was recently told by my employer that due to the loss of a major contract, I would no longer be required in the firm. I am a consultant who is employed with a consulting firm in Canada. I was hired at the start of 2005 on the assumption and indication of the employer that two solid 5 year contracts were in place. One of the clients decided our services were no longer needed in July 2005 and proceeded to terminate the contract. My employer decided not to seek damages from them for his own reasons, but told me that I was to be laid off. I left a full time job to come and work for my present employer. We never actually signed an employment contract although he had one drafted at the time of hire. I had a few things I didn't agree with so I did not sign it,, including the non-competition clause. I agreed with the pay rate, hours of work, etc. (the basics) It was also a one year contract renewable after each year assuming acceptable performance. He assured me that he was going to draft up a new one and pass it by the rest of the employees as well (they did not have one either). He never did and has not to date. We agreed on a severance package in terms of a combination of worked and non-worked severance pay to the end of 2005 as my original contract suggested (1 year). He now also wants to include a new non-competition clause that is to restrict me from securing contracts or employment for two years with the clients that he currently has plus the clients that he has had over the last two years. Of note is that I only worked on files for two of his 15 clients on the list of restricted clients. He is withholding payment of the severance pay until I sign it, but I have refused until my lawyer looks at it (next week). Why would I have to abide by any non-competition even though I am the one being laid off? Also, is it fair that he expects me to not work for or do work for clients that I had nothing to do with at the firm? Also, I was only there for a year and there are no trade secrets or other confidential info that I would take to another employer. Any advice would be appreciated.

[aaron]

So you never signed a noncompete agreement?

[raffeyd]

No not technically, but I was working for the agreed upon hourly rate. He now wants me to sign a non compete contract before he will release the severance pay.

[Mr. Knowitall]

It sounds like you may have to choose, unless he is contractually required to give you severance pay or otherwise breached the terms of your employment. See what your lawyer has to say about it.