If you are signing an employment contract, you may find that it contains a Non-Competition or Non-Solicitation clause. An employer may even want you to sign a separate Non-Competition or Non-Solicitation Agreement. This is quite common, but that doesn’t mean you should take it lightly!

Non-Competition clauses or agreements prevent employees from working with an employer’s competitor for a specific period of time. In other words, it may prevent you from finding work after you have moved on.

Non-Solicitation clauses or agreement are similar, but try to prevent departing employees from poaching former customers, clients, suppliers or co-workers. These types are agreements are legal if they are “reasonable”.  To decide whether an agreement is reasonable, courts will consider the length of the restriction, the geographic scope and whether the restriction was even clear.

These clauses, referred to as “restrictive covenants”, are usually not enforceable. In the case of Martin v. ConCreate USL Limited Partnership, 2013 ONCA 72 which made it to the Ontario Court of Appeal, it was held that restrictive clauses (non-compete and non-solicitation) not allowing for a “clear outside limit”-that is to say, a limit for the clause’s reach- are unenforceable.

Additionally, in the instance of a non-compete or non-solicitation clause wherein a breach of the corresponding employment agreement is found, the courts are more likely to find the clause(s) severable and unenforceable on the basis that an inequality in bargaining power exists between employee and employer (See: ACS Public Sector Solutions Inc v. Arntsen, 48 B C L R (4th) 328, [2005] B C J No. 2656 (QL)).

Non-compete and non-solicitation clauses are very technical and you need ongoing legal advice from an employment lawyer in order to avoid a potentially much more expensive lawsuit.