An Ontario offer restricts your next job. Identify the clause before signing

Read the restricted activity before the heading

Ontario's official guide was published on February 18, 2022 and updated on July 8, 2024. It explains the prohibition effective October 25, 2021. This is older official guidance, not a new October 2026 ban. The guide says the substance of the agreement determines whether it is a non-compete. Mark the activity the clause would prevent you from doing.^[1]

A non-compete restricts activity that competes with the employer's business after the employment relationship ends. The definition covers business, work, occupations, professions, projects, and other competing activity. A time limit or geographic limit does not prevent a restriction from being a non-compete. Record whether the restriction concerns activity after employment ends.^[1]

A non-solicit restricts soliciting, or actively pursuing, the employer's clients, customers, vendors, business partners, or other employees. It can apply during or after employment. A non-disclosure agreement, or NDA, restricts sharing confidential company information and processes. For each sentence, identify whether it concerns contacts, information, or competing work. A shared heading can contain different restrictions.^[1]

Check the date and whether the ESA applies

The guide says employers are prohibited from entering into non-compete agreements on or after October 25, 2021, subject to the stated exceptions. The prohibition can apply to agreements made before employment starts, during employment, or after it ends. Find the date the agreement was entered into. The employment end date answers a different question.^[1]

The ESA does not prohibit non-compete agreements entered into before October 25, 2021. That does not settle whether an older agreement is enforceable. The guide notes possible greater rights under common law. Ask a lawyer to explain those rights and how they affect the wording in your agreement.^[1]

Our editorial recommendation is to confirm whether the ESA applies to your employment relationship before relying on this guide. Give your adviser the complete offer and agreement, including the restriction and its date. An Ontario location alone is insufficient for an individual legal conclusion. Ask the adviser to explain both ESA coverage and any other rules that affect your agreement.^[1]

Check the actual exception conditions

The executive exception applies to holders of specified offices. The guide lists chief executive officer and president. The other listed offices are chief administrative officer, chief operating officer, chief financial officer, and chief information officer. They also include chief legal officer, chief human resources officer, and chief corporate development officer. The exception includes any other chief executive position. Do not assume that every manager or anyone with "executive" in a job title holds one of these offices.^[1]

The business-sale exception requires all stated conditions. First, there is a sale or lease of all or part of a business operated as a sole proprietorship or partnership. Second, immediately following the sale, the seller becomes the purchaser's employee. Third, as part of the sale, purchaser and seller enter an agreement restricting the seller's activity that competes with the purchaser's business after the sale.^[1]

Separate ESA prohibition from enforceability

The ESA does not prohibit non-solicit agreements or NDAs. That does not establish that a particular clause is enforceable. The guide also notes possible greater contractual or common-law rights for the non-compete exceptions. Ask a qualified Ontario lawyer which rules affect the clause and whether its actual wording is enforceable in your circumstances. This article provides general information and does not give legal advice about an individual agreement.^[1]

For your review, use this hypothetical editorial note: [restricted activity], [when it applies], [agreement date], [ESA coverage question], [claimed exception and supporting facts], [questions for the lawyer]. Copy the complete clause into your own review materials. Add the explanation you receive and any proposed wording change before deciding whether to sign. Avoid deciding that every restriction is void or that every NDA is enforceable.^[1]