Demise Of The Restricted Covenant?

Recent amendments to the Employment Standards Act, 2000 (Ontario) and the Competition Act (Canada) may be sounding the death knell for certain restricted covenants in Ontario—both non-competition covenants given by employees, and non-solicitation of employees covenants given by anyone.¹

In Why Ontario Employers Should Review Employment Contracts Now, we discussed the elimination on October 25, 2021, of non-competition covenants given by employees in Ontario, except in certain limited circumstances (see pages four to seven). The precise scope of that amendment to the Employment Standards Act remains unclear but in general, the principle is that employees can no longer be required to enter into non-competition covenants as part of their employment arrangements. In our article, we had proposed using non-solicitation of employee covenants as one method to address the gap. That proposed solution may now be more difficult to implement following recent amendments to the C