Non-Solicitation vs. Non-Compete Agreements

The Big Change in Ontario Law

Since December 2, 2021, the Employment Standards Act (ESA) has banned almost all non-compete agreements in Ontario.

• The Ban — You cannot be stopped from working for a competitor after you leave your job.
• The Exception — The ban doesn't apply to 'executive' level employees (CEOs, CFOs, etc.) or when a business is sold.

What is a Non-Solicitation Clause?

• Clients and Customers — You can still be stopped from trying to take your former employer's clients.
• Colleagues — You can be stopped from trying to hire or poach former coworkers.
• Reasonable Scope — Even non-solicitation clauses must be 'reasonable' in terms of time and geography to be enforceable.

Challenging Enforceability

• Too Broad — A clause that covers an entire industry or province for 5 years is likely invalid.
• Ambiguity — If the language is unclear, courts will usually rule in favour of the employee.
• Public Interest — Courts generally protect an individual's right to earn a living.