Non-Compete Clauses After Bill 27: Are They Enforceable in Ontario?
Since October 25, 2021, Ontario has banned non-compete clauses for most employees under the Working for Workers Act (Bill 27). The ban is broad but the excep...
Frequently Asked Questions
Are non-compete clauses legal in Ontario?
For most employees, no. Since October 25, 2021, the ESA prohibits non-compete agreements for all employees except C-suite executives and sellers of a business who become employees of the buyer. Non-competes in agreements signed before that date are not retroactively voided but remain subject to common-law reasonableness.
I am a VP — does the executive exception apply to me?
Probably not. The exception covers specific chief-level titles (CEO, CFO, COO, etc.) and a catch-all for "any other chief executive position." A Vice-President, Senior Director, or General Manager is not a chief executive unless the role is genuinely comparable in scope and authority.
My employer says I will not get severance unless I comply with the non-compete. Is that enforceable?
If the non-compete is void under the ESA, a condition requiring compliance is itself unenforceable for non-executive employees. Your employer cannot use severance as leverage to enforce a void restriction. Get legal advice before signing anything.
Does the ban apply to non-solicitation clauses too?
No. The ban applies only to non-compete clauses — agreements that prohibit competing after employment ends. Non-solicitation clauses, confidentiality agreements, and intellectual property assignments remain available and enforceable if they are reasonable.
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