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Non Compete Agreements in Ontario Canada

Non compete laws in Ontario and Canada are designed to help protect the interest of the employer after the departure of an employee, regardless of why they left (resignation or termination).

As a business owner and employer, you need to protect yourself and your commercial interests. Over time your key employees learn your ‘tricks of the trade’ and have intimate knowledge about your products, services, and clients. When employees leave, you can’t afford to have your valuable information walk out the door to your competitors.

On the other end of the spectrum, employees can be apprehensive about signing restrictive employment contracts. After all most people need to keep their employment options open and can’t afford to not work should their employment at your company not work out.

If you are in the position of having to create or sign a non compete agreement, contact Michael Lesage. As an experienced lawyer in Toronto, ON he can help you review the fine print and explain the impact the non compete clause could have on your future.

Call our Law Offices to Discuss How We Can Help with your Non Compete Issue

647-495-8995 

What is a Non Compete Agreement?

A non compete agreement is a restrictive covenant that outlines where and for who an employee can work after their resignation or termination. Any non compete clause is designed to protect a business from employees going to work for competitors or starting their own competing business.

Is a Non Compete Agreement Enforceable?

Many people question if a non compete will hold up in court. In general, non competition clauses in Ontario can be difficult to enforce. The Ontario courts are much more likely to enforce non solicitation clauses within a non compete contract.

In order to be enforceable, a non compete clause needs to be specific in terms of the geographic scope, the duration of the restriction, and what exactly is prohibited within the non compete.

Non Compete Clause Examples

Some of the most popular clauses in employee non compete agreements include:

  • Non Compete Independent Contractor
  • Non Compete Non Disclosure
  • Non Compete Joint Venture
  • Non Compete Non Solicitation
  • Non Compete Ordinary Income

Non Compete vs Non Solicitation

Many people wonder, “What’s the difference between a non solicitation and non compete clause?”

In its most basic form a non compete contract prevents an employee from working for another business or starting their own business that is similar to the employer.

A non solicitation clause is often included in a non compete contract, and prohibits the employee from approaching clients of the company for their new employer or own business.

Our Non Compete Agreement Services

  • Writing a non compete agreement
  • Drafting non compete violation letter
  • Non compete breach/enforcing non compete clause
  • Non compete buyout
  • Non compete release
  • Drafting non compete disclosure agreement

Call Michael Lesage Today

Is your employer asking you to sign a non compete contract and you would like legal advice before putting your name to the dotted line?

Or are you a business owner looking to implement a non competition agreement or non solicitation agreement with one or more of your employees or future employees?

Call Hamilton and Toronto business lawyer Michael Lesage at 647-495-8995 for professional legal advice.

Frequently Asked Questions About Non Compete Laws

Creating a non-compete agreement in Toronto has become significantly limited due to legislative changes. As of October 25, 2021, Ontario’s Employment Standards Act prohibits non-compete agreements between employers and employees, with certain exceptions. These exceptions include agreements with executives or in cases where a business is sold, and the seller becomes an employee of the buyer. Outside these specific circumstances, non-compete agreements are generally not permitted, highlighting the need for employers to consider other forms of protective agreements, such as non-solicitation or confidentiality agreements​.

Given the prohibition under the Employment Standards Act, you should not be required to sign a non-compete agreement for most employment positions in Ontario. If you’re asked to sign one, it’s important to understand that such agreements are enforceable only under specific exceptions. If you’re uncertain about the validity of the agreement or your obligations, consulting with a business legal professional can provide clarity and ensure your rights are protected.

If you’re accused of breaching a non-compete agreement, it’s important to verify whether the agreement was enforceable under the current legal framework. Agreements entered into before the October 25, 2021, changes, or those falling under the exceptions for executives or business sales, might still be enforceable. In such instances, disputes are often resolved in court, emphasizing the importance of legal advice to navigate potential challenges and understand your rights.

For employers, the restrictions on non-compete agreements mean exploring alternative methods to protect business interests, such as non-solicitation and confidentiality agreements. These alternatives can safeguard trade secrets and customer relationships without restricting employees’ future employment unduly. For employees, the legislative changes ensure greater freedom to engage in their chosen profession or industry post-employment, except under specific, limited circumstances where non-compete agreements are still permissible.
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