Legal Affairs: Obligation for reasonable employee notice period

…courts will consider lengthy notice periods to be valid and enforceable for executive and senior employees.

Most employees are not aware of their obligation to give reasonable notice of their intention to leave their employment.

Absent of a clause to this effect in an employment contract, the notice must be reasonable.

What is reasonable?

Unfortunately, the courts establish what notice is reasonable depending on a number of factors.

A recent case considered the enforceability of contractual provisions requiring an executive employee of Blackberry to give six months notice of his intention to resign.

The court declared that the relatively long notice period by an employee (six months) is valid and enforceable.

Most often employment agreements only require notice periods in the range of two weeks to a month.

In the case the employee had agreed to provide six months notice of his resignation.

The employee received an offer from Apple and attempted to stop working for Blackberry and join Apple before the six-month notice period had expired.

The court upheld the six-month notice provision as valid and enforceable.

The case is remarkable in that employers rarely attempt to enforce notice provisions but instead sue for damages for breach.

Typically, damages are difficult to recover unless the employer can point to a loss of revenue or extra costs incurred by the early departure of the employee.

It is important to note that the court did not in the case order an injunction requiring the employee to work through the notice period.

It is generally accepted that the courts cannot compel an employee to perform services for an employer.

The important lesson from the case is that the courts will consider lengthy notice periods to be valid and enforceable for executive and senior employees.

We may see employers using longer notice periods to supplement restrictive covenants in employment agreements.

Restrictive covenants are contractual provisions which purport to prevent an employee from working in any competitive role with another employer.

Requiring an employee to give lengthier notice may be another way of restricting an employee’s ability to compete with his or her former employer.

 

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