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through changes following the sale of the business or mergers and acquisitions, or through terminations. Intellectual prop- erty must be protected if the company is still carrying on as an entity. McPhail says that corporate depar- tures should be part and parcel of the same economic plan as for other staff but that the rights of the employer and senior executives after they've left must be spelled out, in particular with respect to stock options, severance, and confidentiality. "If you send off into a competitive world the person who was in charge of your research and develop- ment, you need to examine any con- tractual obligations spelled out in non- solicitation and non-compete clauses. You need to ask what do those clauses do for the employer and how far will they be enforced. If there is no clause, you should ask what fiduciary rights might exist." Harris acknowledges the added com- plexity of the situation when departing individuals have significant knowledge of the business, customers, and know- how. "The courts have recently been very careful to balance the rights of the employer and interests of the employ- ees. Some employees might think they have very strong restrictive covenants in place and undertake terminations believing the employee can't work for a competitive employer. They realize after the fact that they can in some cir- cumstances. "The covenants may be too expan- sive in terms of geographic reach or too broad in defining what a competitor would be, or too long. Many have been shortened up in geographic reach and time." When the sale of the business is involved, Pink says good coun- sel could assist an employer by legal- proofing against successful lawsuits. "Successorship, transfer issues, benefits, and pension plans all need to be dealt with. Employers need to develop poli- cies that are fair to departing employees." He also stresses it is important to be familiar with benefits and pensions in this climate and cautious when dismiss- ing a large proportion of workforce. "Problems of pension funding could trigger the potential windup of the pen- sion plan. Similarly, if you sack the young people and get too many old people, you could strike problems as well." Harris notes: "Employers need to be very clear of rights under pension plans and stock options if it is a public compa- ny. If documentation isn't clear, employ- ees may keep the options, bonuses, and other entitlements they would have kept if they had remained at work." Similarly, employer contributions to the defined- benefit pension plan for medical, den- tal, long-term and short-term disability benefits, and travel insurance may have to continue for the entire ESA notice period, even if the termination is effec- tive immediately. As Pink says: "Good employers have done the planning before they start the process" and lawyers can make that happen. A balanced approach recognizes that learning is a two-way street. The most productive relationships are born of mutual understanding. That's why we're as committed to learning about a client's business as we are to helping clients understand the intricacies of labour law. Toronto 416.408.3221 I London 519.433.7270 I filion.on.ca www. C ANADIAN Law ye rmag.com M AY 2009 45 lion_CL_Feb_09.indd 1 1/20/09 3:48:02 PM