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For a software company, or even a traditional company such as a bank or telecom, protecting technology-related assets includes preserving the value of their software code. One legal mechanism used is to have key employees sign postemployment non-competition agreements (NCAs). A recent decision from Ontario, however, illustrates just how careful you must be in drafting these covenants.

In that case Ceridian Dayforce, a software development company, asserted an NCA over an employee who had left to join another company. One reason the court found the NCA to be unenforceable was that it purported to limit its former employees from doing anything for a competitor, and not simply from writing the same sort of software code the employee had previously worked on at Ceridian.

Lexpert technology columnist George Takach reports at www.lexpert.ca Follow @Lexpert on Twitter. Lexpert is published by Thomson Reuters.

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