Non-Compete & Non-Solicitation Clauses in Ontario

Ontario's 2021 Ban on Non-Compete Agreements

The Working for Workers Act, 2021 amended the ESA to prohibit employers from entering into non-compete agreements with employees as of October 25, 2021. A non-compete clause prevents you from working for a competitor or starting a competing business for a specified period after leaving.

Non-Solicitation vs. Non-Compete: The Key Difference

What Makes a Non-Solicitation Clause Enforceable?

Courts apply a reasonableness test. A clause must be:

• Reasonable in time: 6–24 months is typical; longer periods are more likely to be struck down
• Reasonable in scope: Limited to clients/employees you actually had contact with — not the entire customer list
• Reasonable in geography: Must reflect where you actually worked
• Supported by consideration: If imposed mid-employment without a raise, signing bonus, or promotion, it may be void

What to Do If Your Employer Threatens Enforcement

1. Obtain a copy of your actual employment contract and locate the restrictive covenant clause.
2. Determine whether the clause covers a non-compete (likely void) or a non-solicitation (possibly enforceable).
3. Check whether the clause was introduced mid-employment without additional compensation — if so, it may be unenforceable for lack of consideration.
4. Do not ignore a cease-and-desist letter — respond through a legal representative.
5. If threatened with an injunction, act immediately — courts can grant temporary orders on short notice.

Confidentiality Obligations Are Different

Even where a non-compete is void, you remain bound by your duty of confidentiality. You cannot take client lists, pricing models, trade secrets, or proprietary data when you leave — even if you built them yourself during employment.