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THE QUESTION
I’m currently looking for a new job and I’m applying for roles with some of my company’s competitors. While there isn’t an explicit non-compete clause in my employment contract, I think my boss is suspicious and I feel guilty. I’d rather be honest and fess up about looking for a new job. However, is it possible he could fire me immediately if I confess to interviewing with our competitors?
THE FIRST ANSWER
Chris Randall, founding lawyer, Randall Law, Toronto
Searching for a new job while still employed is common, prudent and often necessary, especially when growth stalls or compensation lags. But, telling your boss you are interviewing with competitors does not insulate you from termination, nor does it improve your legal position.
Before you “fess up,” the truth is that honesty is not a legal shield.
In Ontario, an employer can generally terminate your employment immediately if they learn you are applying elsewhere. This is true even if your contract does not include a non-compete and even if you have done nothing improper. Unless the termination is discriminatory, such as being tied to a protected ground under human rights legislation, or retaliatory, such as punishment for asserting a statutory right, the termination will usually be lawful.
That does not mean you walk away empty-handed. A termination without cause still triggers entitlements to statutory notice or pay in lieu, severance (if applicable) and any contractual or common-law notice obligations that are not otherwise available to an employee who resigns.
Keep in mind, there is an added layer of risk for senior employees or those owing fiduciary duties. Accepting a role with a competitor while still employed, misusing confidential information or breaching restrictive covenants can expose an employee to allegations of cause for termination.
The practical takeaway is that while honesty may feel principled, it often improves the employer’s position, not yours. To alleviate your guilt, the better approach is to keep your search discreet, obtain legal advice regarding your contractual obligations and, once you have secured a new role, give your boss as much notice of your resignation as possible. Doing so will allow him time to plan for your departure and, in many cases, gives you an opportunity to assist with the transition.
THE SECOND ANSWER
Waheeda Ekhlas Smith, barrister and solicitor, Smith Employment Law, Toronto
Do not “confess” to your boss without getting legal advice.
Your question raises primarily restrictive covenant and wrongful dismissal considerations.
You are permitted to look for a new job while still employed and with competitors. You also do not have to confess your job search to your boss. But you must keep in mind a few considerations.
While you may not have a “non-compete” clause in your contract, when looking for work, be mindful of other obligations and clauses, such as confidentiality, duty of loyalty, full time and attention and, depending on your role, fiduciary duties. Simply put, while you are likely allowed to go work for a competitor, you must also remember existing obligations with your current employer. For example, you must be careful not to use confidential information to obtain this new position, such as divulging proprietary information. Or if you have a “full time and attention” clause in your contract, you must be careful as to when and how you are job searching, including attending interviews.
If your boss finds out about your job search, he must not terminate your employment immediately simply because you were looking to work for a competitor. If he does, and if you have not breached any enforceable employment contract restrictive covenants or fiduciary obligations, that would be a wrongful dismissal. In that event, you would be entitled to a severance package that, at the very least, offers you Employment Standards Act statutory minimums, if not the higher common law standard plus additional damages.
Gather all your employment documents including confidentiality agreements, then consult an experienced employment lawyer before speaking to your employer.
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