A non-compete clause in Ontario is a section in an employment contract that tries to stop you from working for a competitor or starting your own business after leaving your job. These clauses are often called non-compete agreements or non-competition clauses — but in most cases, they’re illegal.

What Is a Non-Compete Agreement?

A non-compete agreement (or non-competition agreement) is a promise that limits where and for whom you can work after your job ends.

Employers sometimes include it in contracts for:

• New hires
• Current employees offered promotions
• Departing employees as part of severance packages

Even if it’s short or vague, it still counts as a non-compete clause.

Ontario’s Ban on Non-Compete Clauses

Since October 25, 2021, the Working for Workers Act (Bill 27) made most non-compete clauses in Ontario employment contracts illegal.

Under section 67.1 of the Employment Standards Act, employers:

• Can’t include non-compete clauses in new or existing contracts.
• Can’t ask you to sign one during or after employment.
• Can’t retaliate if you refuse to sign.

Exceptions

Non-compete clauses may still apply if:

• You are a C-suite executive (such as a CEO, CFO, or President), or
• Otherwise, a non-compete in Ontario is void — it has no legal effect.

Are Non-Competes Enforceable in Ontario?

In short: almost never.

Even before Bill 27, Ontario courts treated non-compete agreements as presumptively unenforceable. Employers must prove that the restriction is:

• Reasonable in time...

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