Know your rights
Signed a non-compete? Ontario banned them in 2021
You lost your job, or you're ready to leave it, and a line in your contract says you can't work for a competitor for a year. Before you turn down an offer, know this: Ontario has banned non-compete agreements for most employees since October 25, 2021.
What the law says
The Employment Standards Act, 2000 (the ESA) says no employer may enter into an employment contract or other agreement with an employee that is, or includes, a non-compete agreement. If an employer does it anyway, the Act says the non-compete agreement is void.
A non-compete agreement, under the Act, is one that prohibits you from engaging in any business, work, occupation, profession, project or other activity that competes with your employer's business after the job ends. The rule also covers job applicants, so it applies to a contract you were handed before your first day.
The two exceptions
- Executives. The ban doesn't apply to a chief executive officer, president, chief administrative, operating, financial, information, legal, human resources or corporate development officer, or anyone in another chief executive position.
- The sale of a business. If you sold a business (or part of one), agreed with the buyer not to compete as part of the sale, and became the buyer's employee right after, that agreement is allowed.
Three things the ban doesn't do
It doesn't reach back. The Ministry of Labour's guide says the ESA doesn't prohibit non-compete agreements entered into before October 25, 2021. The guide adds that employees may have greater rights under the common law, the rules courts apply, so an older clause is worth a second look too.
It doesn't cover non-solicitation clauses. A clause that stops you from pursuing your old employer's clients or staff isn't banned by the ESA, according to the guide.
It doesn't cover confidentiality. A clause against sharing your employer's confidential information isn't banned either.
Check your own contract
Look at the date you signed, your job title and what the clause actually stops you from doing. Then ask: you can describe your situation in our chat, or upload the contract or termination letter there, and get an answer that points to the law and to real Ontario decisions.
You can also read how Ontario courts have dealt with restrictive covenants, the family of clauses that non-competes belong to. And if you were let go, the severance calculator shows what you may be owed.
Ontario Severance is independent and is not a law firm. This is general information, not legal advice. From a chat or a calculator result, you can ask us for help finding an employment lawyer, and we reply within one business day.
Sources
This article is general information about Ontario employment law, not legal advice. The law and its application change, and every case turns on its own facts: for advice about your situation, speak with an Ontario employment lawyer.
