Tag archives: employment contracts

Pension plan considerations in the M&A context

In any acquisition, whether for shares or assets, employee benefits and obligations must be taken into account. One of the potentially most onerous obligations includes the provision of pension benefits to employees – this makes it all the more important for companies contemplating acquisitions to consider potential employee pension plan implications.

In a share purchase context, the buyer will typically assume all liabilities of the target company, and if the target company has a pension plan in place, this will often be included. However, if there are significant pension fund deficits, this may be one reason an asset purchase agreement … Continue Reading

Enforcement of restrictive covenants in commercial transactions

Restrictive covenants are often a key mechanism by way of which the buyer of a business is able to protect the value of their purchase. Indeed, in a 2017 review of legal trends in Canadian private M&A, Thomson Reuters has reported that non-competition covenants were found in 52% of the closing conditions of share acquisition transactions.

While such covenants are common, their enforcement has remained an ongoing concern due to the strict reasonableness requirements imposed by the Supreme Court of Canada in JG Collins Insurance Agencies Ltd. v Elsley, [1978] 2 SCR 916 in order to balance the parties’ … Continue Reading

Non-compete: get it signed before!

This post was contributed by Jean R. Allard, Partner, Norton Rose Canada

In a recent Quebec Court of Appeal decision,[1] the court reversed a decision of all previous courts in a case regarding unfair termination for refusal to sign a non-compete agreement three years after the hiring date.

In this case, the employer, a pharmaceutical company, had recruited a chemist who lived in France.

The offer to the employee said he’d be asked to sign a non-compete agreement and a confidentiality agreement. However—and unfortunately for the employer—, only the confidentiality agreement was signed on the employee’s first day … Continue Reading

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