Non-Competition & Non-Solicitation Clauses

Many employment agreements have restrictive covenants which may limit an employee’s ability to work, or the manner in which they work, in the particular field of work. Employers often include non-competition and non-solicitation clauses to restrict an ex-employees ability to work in a particular area for a specified time, and may attempt to limit the ex-employee’s ability to take their customers or clients with them when they leave.

However, are these clauses always enforceable? In some cases, employers make these restrictive covenants too restrictive, meaning that either the geographical region is too wide, or the time restriction is unreasonable – depending on the industry and other applicable factors. The criteria for what is too limiting are not always the same and different from one situation to the other.

A Non-Competition and Non-Solicitation Clause prohibit employees from approaching clients or coworkers after leaving their job. Generally, courts view these provisions more favourably. In some cases, the clause can even prevent employees from poaching their clients. If you are considering signing a non-competition clause, make sure that it is in writing and that it is in effect.

Non-Competition and Non-Selling Clauses prohibit employees from working for specific competitors and other businesses that compete with the employer. They also prevent employees from working for subsidiaries or affiliates. It is important to remember that these restrictions are only valid if the clauses protect legitimate business interests. But they are not always enforceable. Read the fine print carefully before signing any contract.

This short video by Christopher Achkar explains what you need to know when it comes to non-competition and non-solicitation clauses in Ontario.