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ARTICLE · 28 NOVEMBER 2024

Non-Competition Clauses

Millar Kreklewetz
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The Ontario Court of Appeal (the "OCA") has recently upheld (Sims Professional Corporation v. Cooke, 2024 ONCA 388) a non-competition clause, and in the process confirmed...

CanadaLitigation, Mediation & Arbitration
Jack Millar
Jack Millar
John Bassindale
John Bassindale

The Ontario Court of Appeal (the "OCA") has recently upheld (Sims Professional Corporation v. Cooke, 2024 ONCA 388) a non-competition clause, and in the process confirmed several important points about the Court's approach to reviewing such clauses.

This is good news for the direct selling industry and signals that properly drafted non-compete clauses with independent contractors can be upheld in Canada. However, each company's clauses should be considered in the context of the Court's approach, as enforceability can depend on the details.

The Facts

In Sims v. Cooke the clause in issue was contained in a purchase and sale agreement for a dentistry practice sold by Dr. Cooke to Dr. Sims. The clause prohibited the senior dentist from competing directly or indirectly in the practice of dentistry for five years within 15 kms of his former dental office.

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