Non-Compete Clauses – An Often Used But Rarely Effective Tool

The Ontario Superior Court recently reminded employers that non-compete clauses in employment contracts are usually worth less than the paper that they are written on. In Ceridian Dayforce Corporation Justice Kristjanson refused to enforce a non-compete that a software company had included in its employment agreement with a software engineer involved in program development. This case is a good reminder for employers that careful consideration is required when drafting restrictive covenants in employment contracts. It is important that employers only include restrictive covenants that will be enforceable.

In Ceridian the Employer wanted to enforce its non-compete clause against a software developer who resigned. The Employer was concerned that the former employee held trade secrets on the software development and processes that could impact its business if disclosed or used by a competitor. The non-compete was included in the employment contract that was signed at