Are non-compete clauses enforceable in Canada?
They are difficult to enforce. Canadian courts treat restrictive covenants as presumptively unenforceable restraints of trade and uphold them only where they are reasonable and protect a legitimate proprietary interest. In Ontario, the Working for Workers Act now prohibits most non-compete agreements entered after October 25, 2021, with limited exceptions for executives and business sales.
What is the difference between non-solicitation and non-competition?
A non-solicitation clause prevents you from soliciting the employer's clients, customers, or employees after you leave. A non-competition clause is broader — it prevents you from working for a competitor or starting a competing business at all. Courts are far more willing to enforce a reasonable non-solicitation clause than a non-competition clause, which is seen as a greater restraint on your ability to earn a living.
What makes a non-solicitation clause reasonable?
Reasonableness turns on duration, geographic scope, and the range of activities restricted. A clause limited to actual clients you dealt with, for a modest period such as 6 to 12 months, is more likely to be upheld than a broad, long, or geographically sweeping restriction. The clause must be clear and unambiguous; courts generally will not rewrite an overbroad clause to save it.
Can my employer stop me from working for a competitor?
Only in narrow circumstances. Absent an enforceable non-competition clause — which is now banned for most Ontario employees — your former employer generally cannot prevent you from working for a competitor. They can, however, enforce a reasonable non-solicitation clause and protect genuine trade secrets and confidential information through separate confidentiality obligations.