A Departing Plumber, a Client List, and a Non-Solicitation Clause

The situation

Tuan and his sister Layla had built their plumbing and mechanical company over about fifteen years, growing it from a two-truck operation into a business doing roughly $3 million a year in revenue, mostly service and maintenance contracts with property managers, restaurants, and small commercial landlords around Mississauga. Tuan ran operations and estimating; Layla, who had spent years working as a court clerk before joining the family business full-time, handled the office, billing, and the client relationships that kept the recurring work coming in. It was, in the way many trades businesses are, a company built on relationships as much as on pipe.

One of those relationships was with Karim, who had joined the company nine years earlier as a journeyman plumber and worked his way up to senior estimator, the person who priced jobs and often the first point of contact for larger commercial clients. Karim knew the maintenance schedules, the pricing history, and the personalities of the property managers as well as Tuan and Layla did, if not better, because for years he had been the one on site when something broke.

When Karim gave notice to start his own plumbing service, Tuan and Layla were disappointed but not alarmed — trades people leave to go out on their own often enough, and Karim had always been straightforward with them. What alarmed them, about six weeks later, was a call from one of their longest-standing property management clients, asking why Karim had reached out directly, offering to take over their maintenance contract at a lower rate than the company was currently charging.

The legal problem

When Karim was promoted to estimator four years earlier, the company had him sign an updated employment agreement that included a non-solicitation clause: for twelve months after leaving, he agreed not to solicit business from clients he had personally serviced during his last two years of employment. Non-solicitation clauses like this are common in Ontario employment agreements for staff with direct client relationships, and courts will generally enforce them if they are reasonable in scope, geography, and duration — unlike broader non-competition clauses, which the Employment Standards Act, 2000 now prohibits for most employees.

Tuan and Layla brought the signed agreement, and a growing list of clients Karim appeared to have contacted, to Treadstone Law. Our review found the clause itself was well drafted: it was limited to clients Karim had actually worked with, ran for a defined period, and did not try to stop him from competing generally, only from actively targeting the company's existing book of business. That mattered, because an overly broad clause — one that tried to bar him from the trade altogether, or from all clients in the region regardless of whether he had dealt with them — would have been vulnerable to being struck down as unreasonable, and a court asked to enforce an unreasonable clause will often refuse to enforce any part of it.

The harder question was not whether the clause was enforceable, but what enforcing it should look like. Karim was still, personally, a familiar and well-liked figure to several of the company's biggest clients. A public lawsuit risked souring those very relationships even if the company won it. At the same time, doing nothing meant watching a competitor built partly out of the company's own client list.

What we did

1. Confirmed which contacts actually breached the clause. Of the roughly fourteen clients Karim appeared to have reached out to, our team worked with Layla to identify which ones he had personally serviced in his final two years — the group the clause actually covered. That narrowed the dispute to nine clients, three of whom had already moved their maintenance contracts to Karim's new company.
2. Sent a cease and desist letter setting out the company's position clearly. The letter identified the clause, the specific solicitation the company had evidence of, and asked Karim to stop contacting the remaining protected clients and to account for the contracts already moved, without immediately threatening litigation — preserving room for a negotiated resolution rather than forcing an adversarial posture from the outset.
3. Advised on the realistic limits of the claim. We explained to Tuan and Layla that even a successful non-solicitation claim would not automatically return the three lost contracts; property managers are free to choose their own contractors, and a court order binds Karim's conduct, not the clients' decisions. The company's realistic goal was to stop further solicitation and recover some value for the contracts already lost, not to guarantee those clients would come back.
4. Negotiated directly with Karim's own lawyer once he retained one. Karim did not dispute signing the agreement but argued the twelve-month period was ending soon regardless and that continued conflict would cost both sides more than it was worth. Rather than commence a Superior Court action for breach of contract, which could have taken a year or more to resolve and would have required Layla and several clients to give evidence, our team negotiated directly toward a settlement.
5. Reached a settlement that traded a shortened restriction for a payment and a clean stop. Karim agreed to stop contacting the remaining six protected clients for the balance of the non-solicitation period and to pay the company roughly $18,000, reflecting a portion of the value of the three contracts already moved, calculated against their approximate annual billing. In exchange, the company agreed not to pursue further legal action and to give Karim a neutral reference if any of the remaining clients asked about his departure.

The outcome

The settlement did not undo the loss of the three contracts that had already moved before the company acted — those clients stayed with Karim's new company, and that portion of the revenue, worth roughly $40,000 a year, was gone. But the remaining six protected clients stayed put, the solicitation stopped immediately once the agreement was signed, and the company recovered a partial payment toward the contracts it had already lost, without the cost, delay, or client-facing exposure of a trial.

Tuan and Layla later said the outcome felt less satisfying than winning outright would have, but more useful. A lawsuit dragged through the Superior Court would likely have taken well over a year, during which the non-solicitation period itself would have expired, making an injunction largely moot by the time any judgment arrived. It would also have required subpoenaing several of the same clients the company was trying to keep — an uncomfortable position to put them in, and one that could easily have pushed a wavering client toward Karim rather than away from him.

Six months later, the company had replaced most of the lost revenue with new commercial accounts, something Layla credited partly to the fact that clients who heard about the dispute saw the company handle it firmly but without a public fight. Karim's own business, for its part, was free to grow through new customers once the restricted period ended, without the shadow of an unresolved lawsuit hanging over it. Neither side got everything it might have wanted from a trial, but both were able to move on within months rather than years.

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