Court blocks executive’s move from Blackberry to Appledanlublin | Friday, March 28th, 2014 | No Comments »
On March 24, 2014 the Ontario Superior Court of Justice prevented a senior executive at Blackberry from moving to its major competitor, Apple.
In BlackBerry Limited v. Marineau-Mes, 2014 ONSC 1790, the debate centered on an employment contract containing a six-month resignation provision. Among other things, Marineau-Mes had promised to give Blackberry six months’ advance written notice of his intention to resign. He did not.
On December 23, 2013, Martineau-Mes gave Blackberry notice of his resignation. On December 24, 2013 he advised that he would be joining Apple in two months’ time in California.
Blackberry argued Martineau-Mes was contractually obliged to provide six months’ notice. Martineau-Mes argued that, if anything, Blackberry was limited to damages for replacing him if he failed to give adequate notice, and that he was not required to give notice because:
- The contract violated the Employment Standards Act, 2000 (the “ESA”) because it did not provide him with adequate vacation pay;
- The contract itself was unenforceable due to a lack of consideration;
- The six-month resignation period was tantamount to a non-compete provision and therefore void against public policy; and
- Pursuant to the contract, he had “Good Reason” which would allow him to resign without providing six month’s advance notice.
Despite able arguments, the court was not convinced that the termination provision offended the ESA or that Martineau-Mes had not received consideration in exchange for the contract when he took on the role of Executive Vice President.
Further, the court did not agree that the six-month resignation provision was akin to a non-competition clause because, among other things, Martineau-Mes knew that Blackberry needed him to transition his role and that he must remain available to perform his duties during the period of resignation. Even if the provision were to be found to be a non-compete, the court deemed it reasonable in the circumstances.
Finally, the court was not convinced that Martineau-Mes had “Good Reason” pursuant to the contract to resign without notice. Even if there was Good Reason, Martineau-Mes could only effect this clause if he gave Blackberry 15 days’ notice and a chance to rectify the breach. He did not and therefore could not rely on the provision.
Ultimately, the court determined that Blackberry was entitled to a declaration that the contract was binding and that Martineau-Mes was obliged to provide six months prior notice of his resignation. Effectively, this blocks Martineau-Mes from joining Apple until June 23, 2014.
This is an unusual case as not only is it rare for an employer to pursue an action against a departing employee for failure to provide reasonable notice of resignation, but even rarer still for an employer to seek enforcement of the resignation provision. If any, an employer will occasionally sue for damages caused by the employee’s failure to provide reasonable notice. Presumably, Blackberry decided to pursue the action to prevent one of its executives from moving to a competitor for as long as legally possible, but the case does provide an interesting precedent for an employer enforcing a resignation provision.