My 22-year old daughter had been a barista for the first five years, then promoted to supervisor before being terminated for "poor performance." She attempted repeatedly to resolve issues with upper management and HR but was unsuccessful. The separation package, which offered three-months pay and benefits, contains a clause barring her from applying to any of the chain's other locations or affiliated companies in future. She asked that the clause be removed and was refused. Is this legal? Is there any way to have that clause removed?
THE FIRST ANSWER
Vice-president, VF Career Management, Calgary
Although your question requires a legal opinion, from a human-resources perspective, these clauses are not unusual. Whenever an employee receives a severance package or employment offer that contains clauses limiting future employment options (short or long term), it is highly advisable to seek legal advice.
Employers, however, cannot prevent you from working. And unfortunately, what happened to you is equally not unusual, where employees are dismissed for personal reasons. It may not be documented as the reason, but making it a without cause termination entitles your daughter to a severance, and still qualifies her for employment insurance (pending she has been paying into it and has the correct number of insurable hours).
She seemed to do the right thing by discussing it with human resources, so it is important to keep everything documented for proof and ease of understanding. Please keep in mind that sometimes, even with the most complete investigation from human resources, a decision may be overruled by someone higher up in a company and unfortunately, your desired outcome may not happen.
THE SECOND ANSWER
Partner at Whitten & Lublin Employment & Labour Lawyers, Toronto
When employers claim that their contractual clauses are "standard," they are applying a negotiating tactic designed to have you believe that they have little to no ability to change the language. This is often just a ploy, masking the fact that they just don't want to change the clause or take it out, not that they can't do it.
Legally, the employer has every right to include terms that will benefit it, as part of paying out a severance package. A term stating that your daughter will never apply for a job with the company is a little unusual but not unheard of and definitely not illegal. Your daughter has to decide whether she wants to work at this company in the future and how important this restriction is to her to begin with. Most of my clients fired under similar circumstances have zero interest in returning to work for the company that fired them. Therefore, when I see a clause prohibiting reapplying for future employment, I often advise my clients to ignore it and focus on the more important issue – the amount of severance the company is offering as a result of the termination.
Like all contracts, severance packages and all of the clauses within them are generally negotiable. If your daughter is completely hung up on having the right to work for this company in the future, despite how they treated her, then she should not sign the documentation and take her chances that she would achieve a better deal in court, or she should try to negotiate with the company further and seek other improvements to her deal (i.e. more money and benefits) if the employer is truly not prepared to amend this one contentious term.
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