Can I stop a former employee from working for a competitor in Ontario?

Enforcing non-competition clauses against former employees in Ontario became significantly harder in October 2021, when the Working for Workers Act, 2021 prohibited non-competition agreements for most employees in Ontario. Subject to limited exceptions for executives and for employees in the context of the sale of a business, non-competition clauses in employment agreements signed on or after October 25, 2021 are void.

For agreements signed before that date, courts already applied a strict test: the restriction had to be reasonable in scope, duration, and geography; no broader than necessary to protect the employer's legitimate interests; and clearly worded. Even then, many were struck down.

Non-solicitation of clients and non-solicitation of employees (preventing a former employee from recruiting their former colleagues) remain lawful and are generally more enforceable, provided they are reasonable in scope and duration. A six-to-twelve-month restriction against soliciting clients the employee actually dealt with is typically more defensible than a broad general prohibition.

Confidentiality obligations survive employment regardless of whether non-competes are enforceable — a former employee cannot take trade secrets or use confidential client information in a new role.