7 August 2020

How employers can protect their start-up and training expenses when onboarding new employees?

By Me Alexandra Criquet

When hiring new employees, employers sometimes have to incur significant costs in order to integrate these new members into the pre-existing team, particularly in terms of training. In this regard, the time, money and effort invested can have a significant impact depending on when these employees decide to leave the company. It is therefore important to anticipate the consequences of an early departure, as illustrated in a recent decision.

In Gossimo (Clinique esthétique) inc. c. Weigensberg (http://canlii.ca/t/j8j7m), the Court of Québec clarified the validity and scope of a clause included in an employment contract, providing for the reimbursement of certain amounts incurred by the employer in the event of an early resignation. This clause was part of the non-compete clause.

In this case, the clause did not specify an amount and the employee claimed that she was no longer in possession of the property acquired by the employer for the benefit of the employee’s training, thus calling into question its validity.

The clause in question read as follows:

“Furthermore, if the employee leaves before the expiration of a period of twenty-four (24) months following the training or investment, the employee commits to immediately reimburse the amount of $ ______ to the employer and commits to respect the clauses of the non-competition, non-solicitation and default. “

However, the Court considered that when the employment contract was signed, the employee was aware of her obligations and that the property used (although no longer in her possession) had indeed been used in the context of the employee’s training. The Court therefore found that the employee had to assume the costs as agreed between the parties.

In conclusion, when investing time in training employees and making specific assets available to them as part of their training, this type of clause may become relevant if the employees in question were to resign before the end of their training period.

This decision is a further reminder of the importance of the negotiations leading up to the signature of a contract, which are taken into account in assessing the intention of the parties, as well as their respective obligations.

We invite you to contact one of the members of our litigation team (https://krblaw.ca/team/) in order to address the concerns raised with respect to the foregoing.

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