In today’s job market, titles like “Chief Executive” and “Manager” are appearing more frequently than ever. While they may enhance a LinkedIn profile or add polish to a resume, these titles don’t always reflect the actual responsibilities of the role, and can create challenges from an employment law perspective. This blog post explores the legal and practical consequences of holding a C-suite or managerial title, particularly when it comes to signing non-compete agreements, qualifying for overtime pay, and navigating mitigation after termination.
Non-Compete Agreements
While there is currently no statute in Ontario that governs non-solicitation clauses, the Employment Standards Act, 2000 (the “ESA”) sets out clear rules regarding non-compete agreements. A non-compete agreement prohibits a departed employee from engaging in business or work that competes with their former employer after the employment relationship ends for a certain period of time, generally within a certain geographic region.
Due to the restrictive nature of non-compete agreements, particularly for employees, section 67.2(1) of the ESA provides that “no employer shall enter into an employment contract or other agreement with an employee that is, or that includes, a non-compete agreement.” However, section 67.2(4) carves out a notable exception: non-compete clauses are permitted for employees who hold executive positions such as chief executive officer, president, chief financial officer, or chief operating officer.
As a result, some employers may assign inflated executive titles as a way to sidestep the general prohibition on non-compete agreements. If you’re offered a position with a “chief” or executive-type title and your employment contract has a non-compete clause in it, be sure to confirm that the responsibilities and compensation for the role are consistent with the executive role and not simply a label used to impose post-employment restrictions. Further, if you already have a non-compete agreement that is part of your contract, and you are concerned about your obligations under the non-compete, speaking with an employment lawyer who is knowledgeable in non-compete agreements can be worthwhile.
Overtime
Another common issue with job title catfishing is the impact it can have on a worker’s earnings, particularly when it comes to overtime pay. When a worker’s job is mislabeled as a “manager” or a “supervisor”, without any corresponding managerial/supervisory duties, the worker is often confused about whether they are entitled to overtime pay because of their job title.
Under the ESA and its Regulations, workers whose work is supervisory or managerial in character are not entitled to overtime pay when they work more than 44 hours per week.
However, this does not necessarily mean that if one’s job title includes the terms “manager” or “supervisor” that they’re automatically not eligible overtime pay. Instead, the character and nature of the work that is actually performed by the worker will determine their eligibility for overtime pay. For example, does the worker have the power to make decisions on behalf of the company? Can they hire and fire other employees? Can they impose discipline on employees? Do they supervise others?
As with executive titles and non-compete clauses, a “manager” or “supervisor” title alone does not determine whether you are exempt from overtime protections. Courts will look at the employee’s actual job functions, not simply their job title or employment contract. However, before accepting a role that claims to be managerial, or assuming that you’re not entitled to overtime pay because your job title includes these terms, ensure that the responsibilities and authority you’re given genuinely reflect a management position.
Mitigation Upon Termination
The distinctions between an employee’s job title and their actual job duties have important implications when it comes to mitigation after their employment has been terminated.
If you’ve been given an inflated title, such as “manager” or “executive” without the corresponding duties or experience, it may affect your ability to find comparable employment. There is a risk that you would appear overqualified for the roles that match your actual skillset, or you could be considered for a position that you are not equipped to perform. In both cases, your job search becomes significantly more difficult.
In wrongful dismissal cases, courts expect the dismissed employee to take reasonable steps to mitigate their losses by finding comparable alternative employment. However, when there is a misleading job title on your resume, it can complicate this process and potentially impact the damages that you’re entitled to. This is why it is crucial to ensure that your job title reflects your day-to-day responsibilities, both during employment and when negotiating termination terms.
Questions About Employment Law in Ontario?
If you are an employee or employer looking for employment law advice in Ottawa or Ontario, please don’t hesitate to contact our Employment Law team at Mann Lawyers.
This blog post was written by Carly Baldachin, Summer Student, and Lori Philpott, a member of the Employment Law team. Lori can be reached at 613-369-0382 or at lori.philpott@mannlawyers.com.
