Non-Compete Clause Update

Non-Compete Clause Update
Photo by Leon Seibert on Unsplash

In a recent post, we talked about Ontario’s then-proposed and now law ban on non-compete agreements in employment contracts under Bill 27, Working for Workers Act, 2021 (“Bill 27”). The ban was effective as of October 25, 2021. Initially, there was some confusion about the enforceability of non-compete agreements or clauses entered into prior to the introduction of Bill 27. The Superior Court of Justice has recently released its decision for Parekh et al. v. Schecter et al., which clarifies that enforceable non-compete clauses entered into before October 25, 2021 will not be impacted by the ban and can be upheld. 

The Decision

The decision in Parekh et al. v. Schecter et al. revolves around the enforcement of a non-compete clause restricting a dentist from practicing dentistry within a 5 km radius of the dentistry practice for 2 years following the end of the Associate Agreement. The dentistry practice was purchased by the plaintiffs in 2020. An associate dentist at the practice resigned shortly after and began to work at another dentistry practice within a 5 km radius, which culminated in the plaintiffs bringing an interlocutory injunction motion to enforce, amongst other restrictive covenants, the non-compete provision. Justice Sharma applied the common law with respect to restrictive covenants and granted the plaintiffs’ interlocutory injunction enforcing the non-compete provision.

Bottom Line

Unlike in Waksdale v. Swegon North America Inc., a decision we have discussed extensively, employers should be less inclined to worry about the retroactive application of Bill 27 on their existing non-compete clauses. We understand that some employees would never have been hired under their current terms of employment had they not agreed to refrain from competing with the company at their next job. So long as a non-compete provision entered into prior to October 25, 2021 is reasonable and necessary in the circumstances, it can be grandfathered in and will not be impacted by Bill 27’s amendments to the Employment Standards Act, 2000 with respect to non-competes. 

If you need one-on-one advice from a lawyer to assist you with navigating non-compete agreements or clauses in employment contracts, please get in touch for a consultation. For those employers looking for general templates and guides for employment contracts, termination letters and releases, we have a great DIY toolkit – The Workplace Law Bundle!

Share the Post:

Related Posts

Canadian flag displayed in front of a government building, representing proposed federal labour law reforms under Bill C-39 and changes to the Canada Labour Code.

Federal Bill C-39: Major Changes Proposed for Federal Labour Relations 

Federal Bill C-39 proposes major changes to the Canada Labour Code that could reshape labour relations for federally regulated employers and unions. From expanded government intervention during strikes and lockouts to new collective bargaining rules and mediation processes, these reforms may significantly impact workplace disputes, collective agreements, and the balance between protecting workers’ rights and the national economy.

Read More »
Person working remotely on a laptop beside a swimming pool, illustrating remote worker management, employee accountability, and flexible work arrangements.

Remote Worker Management: Accountability without Constant Check-Ins 

Managing a remote team doesn’t require constant check-ins. Effective remote worker management comes from clear expectations, transparent systems, and trust. Learn how to create accountability, improve collaboration, and measure results without micromanaging employees. Discover practical strategies to build a productive remote workforce that stays aligned, engaged, and focused on outcomes rather than online presence.

Read More »
Mountain village with wooden buildings overlooking a valley, representing workplace accommodations that can evolve while supporting long-term stability and growth.

Can An Employer Change An Accommodation? 

Can an employer change a workplace accommodation once it has been in place for years? A recent Ontario court decision confirms that accommodations are not necessarily permanent. Employers have flexibility to modify accommodations when employees remain reasonably accommodated and free from discrimination. Learn what this ruling means for disability accommodation, workplace management, employee benefits, and legal compliance.

Read More »

Contact Us

Thank You For Your Interest. Kindly Complete The Form Below. Our Client Services team will be in touch with further information about our fees and intake process.
[grow-contact-form]