Non-Competition Covenants In Dental Practice Sale Are Enforceable

A 2024 decision of the Ontario Court of Appeal, Dr. C. Sims Dentistry Professional Corporation v. Cooke, affirmed the enforceability of a restrictive non-competition covenant or clause (sometimes referred to informally as a "non-compete")¹ in a business purchase and sale agreement of a dental practice. The court also set out the conditions that will help it determine the enforceability of a such clauses.

Background

In July 2017, Dr. Sims entered into a purchase and sale agreement to purchase Dr. Cooke's dental practice (the "Agreement"). The Agreement included a non-competition covenant which specified that Dr. Cooke was required to work in the practice for a period of two to five years to ensure patients properly transition to the new dentist and he was prohibited from working within a 15 km radius of the practice for five years after his association with the practice ended. Following his departure from the practice, Dr. Cooke began working at a dental practice