Bill also contemplates other employment-related restrictions, say employment lawyers

Proposed federal legislation to curb non-compete clauses would mark a “significant” shift in employment practices, labour lawyers say—a change that matters to HR professionals because it will force a rapid overhaul of employment contracts, compliance frameworks and talent retention strategies.

In a report on Bill C‑31, MLT Aikins lawyers Amy Gibson, Megan Kheong and Lynsey Gaudin caution that organisations should begin preparing now, even as the legislation continues to move through Parliament.

Ontario became the first province to prohibit non-compete agreements, effective October 25, 2021, under section 67.1 of the Employment Standards Act (the Working for Workers Act), with exceptions for executives and for the sale of a business. Bill C‑31 would now extend a comparable ban to federally regulated workers.

“An employer cannot agree to, impose on or induce an employee to agree to a non-compete clause or other employment-related restriction,” the authors note, underscoring the breadth of the prohibition.

The definition of a non-compete clause is broad, capturing any term that restricts a worker from engaging in competing activity after employment ends. If enacted, most such clauses would be void, meaning they would be unenforceable and employees would not be bound by them.

For HR professionals, Gibson, Kheong and Gaudin signal that this would eliminate a long-standing tool used to protect...

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