It is common for employers to include language in their staff contracts to help safeguard business interests. This may take the form of obligations to protect confidential information and/or refrain from soliciting staff, suppliers and/or clients after the employment relationship ends.

In early December 2021, the Ontario Government passed into law a ban on non-compete agreements. Non-competes are a form of restrictive covenant used to limit the ability of employees to seek work with competitive alternate employers. Ontario’s non-compete ban took retroactive effect as of October 25, 2021. But that begged the question, what happens to non-compete agreements entered into before this date?

Restrictive covenants (such as non-competition and non-solicitation clauses) are a common feature of many employment agreements. It is relatively rare, however, that companies resort to litigation to enforce these requirements by way of an injunction. This may be down to the costs associated with doing so, or that the required legal threshold to obtain an injunction is high.

A non-solicitation clause is a contractual requirement that serves to protect an employer from a departing employee’s attempts to recruit its staff or solicit business from its customers, clients or suppliers. At their root, these clauses are designed to protect the legitimate business interests of a company or organization, and to avoid unexpected loss in the event that staff depart.