What is a non-solicitation clause and how is it different from a non-compete for a departing employee?

A non-solicitation clause restricts a departing employee from actively going after the former employer's clients, customers, or staff for a defined period after leaving — for example, trying to convince key clients to move their business, or trying to recruit former coworkers to follow them to a new employer. A non-compete clause goes further, restricting the former employee from working for a competitor, or starting a competing business, in a similar field or geographic area for a period, regardless of whether they solicit anyone at all.

Ontario law treats these differently. Since 2021, the Employment Standards Act, 2000 has prohibited non-compete agreements for most employees, with narrow exceptions such as senior executives and non-competes made in connection with the sale of a business. Non-solicitation clauses were not banned by that change and generally remain enforceable if they're reasonable in scope, duration, and geographic reach, and protect a legitimate business interest rather than simply trying to prevent ordinary competition.

Because the ESA's non-compete ban only reaches non-competes specifically, employers and departing employees both need to understand which category a particular clause actually falls into before assuming it is, or isn't, enforceable.