Melanie Polowin of Gowling Lafleur Henderson LLP. (Darren Brown, OBJ)

It's not uncommon for David Spears to pick up the phone only to hear a client complain they're at their wit's end with an employee.

The BrazeauSeller lawyer, experienced in representing both employees and employers in wrongful dismissal cases, often hears of how a particular worker is underperforming or failing to meet expectations. Typically the client insists the employee be dismissed, seemingly with cause.

But then he sees the employee's personnel file, and the context of that conversation often turns on a dime.

"You look through (it) and the last three performance reviews were exceptional ... It is what you call a plaintiff's best friend, the less-than-honest performance review," he illustrated. Indeed, explaining away a glowing performance review before a wrongful dismissal case judge is just one consequence of failing to sidestep hazards in employment law, say some of Ottawa's leading experts in the field.

The good news, they add, is that avoiding many common traps is as easy as an honest assessment in those very same performance reviews.

Using precise language in employment agreements signed in advance of an employee's start date, along with regularly reviewing internal policies to ensure conformity with employment regulations, are both key to preventing costly headaches down the road.

Intellectual property can be a tech firm's most valuable asset, and failing to properly protect that can affect a company's value in mergers and acquisitions.

Gowling Lafleur Henderson's Melanie Polowin, who's focused exclusively on employment law for almost a decade, said reviewing a company's IP protection is part of the due diligence process of a financing or M&A deal.

Unlike American rules, where employees 'assign' their moral rights to IP, the Canadian Copyright Act only allows an individual to 'waive' their rights in favour of the employer, said Ms. Polowin.

"It's a tiny difference in terminology, but what it does is potentially undermine the company's ability to fully own and exploit its IP," she said.

From a process perspective, it is important agreements are signed in advance of an employee's start date. Agreements signed after an employee starts work must contain 'fresh consideration,' or some sort of compensation, to be given to the employee in exchange for waiving their moral rights to IP, said Ms. Polowin.

This applies not only to IP agreements, but also other employment contracts such as non-compete and non-solicitation deals, said BrazeauSeller's Mr. Spears.

In general, the courts are loath to enforce these sorts of restrictive covenants and will look at whether an agreement is reasonable and necessary, he said.

To ensure an agreement fits this criteria, Mr. Spears suggests employers think about the geographic scope and length of time covered under an agreement, in addition to specifically defining the industry covered by such an agreement.

"If it's not reasonable, a court won't redraft it for you. A court won't change a two-year non-compete to a one-year. What a court will do is simply strike down a non-compete completely," he said.

While it is prudent to plan ahead for when an employee and employer part ways, it is also important to review a company's policies and practices to ensure they comply with employment standards requirements.

Four separate class-action lawsuits where employees have claimed employment standards entitlements are currently before the Ontario Superior Court. Until recently, employees have generally not tried to use class-action vehicles to enforce their entitlements, said Ogilvy Renault lawyer Daphne Fedoruk.

Although the class actions have not yet been certified and are likely to face significant opposition, Ms. Fedoruk said the appearance of the class-action vehicle in these sorts of employment cases raise red flags for employers.

"The challenges of facing a class-action claim are part of what makes the stakes higher," she said.

Employers should also take note of the nature of the claims, said Hicks Morley partner Andrew McCreary, as three of them involve employee demands to be paid overtime. Many employers are lax when it comes to overtime, where they don't have their employees 'punch the clock' or keep close track of hours.

Employers are responsible for tracking employee time, and if a complaint is made and the records are not there, it is difficult to refute an employee's claim of having worked overtime, he added.

This is a particular problem in relation to employee use of BlackBerrys and accessing the company network to work from home, said Mr. McCreary.

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TOP TRAPS IN EMPLOYMENT CONTRACTS

The invisible contract: An employment contract automatically arises when a candidate is offered and accepts a job. Unless terms are clearly and properly defined in writing, the law will impose certain 'invisible' terms in every employment contract.

Timing is everything: Deal with all important employment terms and conditions at the offer stage.

Employees vs. consultants: Even when both sides agree to choose consulting, the law sometimes disagrees.

Take notice of reasonable notice: Without enforceable contractual terms specifying rights on termination, the employee is entitled to 'reasonable notice,' assessed on individual circumstances.

Confidentiality and IP ownership: Use stand-alone agreements at the offer stage, for everybody from the mail-room guy to the CEO.

Non-competition: Define restrictions at the offer stage, and avoid 'one-size-fits-all' provisions.

Source: Melanie Polowin, Gowling Lafleur Henderson

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