Non-Compete Agreements in Ontario: What Still Works After the Ban
Ontario’s 2021 changes significantly restricted non-compete agreements.
Most are now unenforceable.
The Shift
Non-competes are prohibited in most employment relationships, with limited exceptions.
This does not eliminate all restrictive covenants. It changes which ones are available.
Non-Solicitation Remains
Non-solicitation clauses are still enforceable if they are reasonable in scope and duration.
These clauses focus on protecting relationships rather than restricting competition broadly.
Misclassification Risk
If a contractor is later found to be an employee, a non-compete drafted for a contractor relationship may become unenforceable.
The classification affects enforceability.
The Practical Takeaway
The enforceability of restrictive covenants depends not only on drafting, but on the underlying relationship.
If that relationship is misclassified, the covenant may not hold.