To draft an enforceable non-solicitation clause in Ontario, you must legally restrict the employee only from poaching clients they actively interacted with, and limit the restriction to a reasonable timeframe, typically 12 months. Overly broad clauses will be struck down by the courts.
When key employees resign, the biggest threat to your business is not just their departure, but the knowledge and relationships they take with them. An angry or highly motivated former employee could potentially contact your best clients or poach your top talent to join a competitor.
While Ontario law has severely restricted non-compete agreements, non-solicitation clauses remain entirely legal and highly effective. 📝 Whether you operate a tech startup in Waterloo or an accounting firm in Toronto, a well-crafted non-solicit protects your client base without unfairly restricting a worker’s right to earn a living. Browsing our directory to find a skilled employment lawyer is the best way to ensure your contracts are rock solid.
Step-by-Step Process in Ontario
Ontario courts are highly suspicious of any contract that restricts free trade or employee mobility. If your non-solicitation clause is drafted too aggressively, a judge at the Superior Court of Justice will simply declare it void. Here is how you can draft a clause that actually survives judicial scrutiny.
Step 1: Clearly Define ‘Solicitation’
The core of your clause must clearly define what constitutes forbidden behavior. Solicitation means actively reaching out, encouraging, or enticing a client to leave your business and follow the employee to their new firm.
You must understand that a non-solicit cannot stop a client from voluntarily leaving. 👤 If a client discovers the employee left, finds them on LinkedIn, and begs to bring their business over without any prompting from the employee, the employee has not breached the non-solicit. This is known as passive acceptance.
Step 2: Limit the Scope to Specific Clients
This is where most businesses fail. You cannot legally ban a former worker from contacting every single person in your company’s CRM database. The restriction must be reasonable and directly related to the employee’s role.
Generally, you can only restrict them from soliciting clients they had direct contact with or managed during their last 12 to 24 months of employment. 🔍 Banning them from talking to clients they never even met is viewed as unreasonable overreach by Ontario judges.
Step 3: Establish a Reasonable Timeframe
A permanent ban on solicitation is illegal. You must limit the restriction to the specific amount of time your business needs to introduce a new account manager to the clients and solidify the relationship.
For most mid-level employees in Ontario, a timeframe of 6 to 12 months is considered highly reasonable. ⌛ For senior management or partners, courts may occasionally uphold restrictions lasting up to 18 or 24 months, but anything beyond that is incredibly risky to enforce.
Step 4: Include an Internal Non-Poach Clause
Clients are not your only valuable asset. Your contract should also contain a non-solicitation of employees clause. This prevents the departing worker from actively recruiting their former colleagues to join them at the new competing firm.
Similar to client restrictions, this must be time-bound, usually aligning with the 12-month limit placed on the client non-solicit. 💼
How Much Does it Cost in Ontario?
Investing in customized employment contracts is vastly cheaper than losing your top five clients to a former employee. Relying on generic templates often leads to unenforceable clauses.
- Lawyer Drafting Fees: Having a business lawyer draft a customized employment contract containing enforceable non-solicitation and confidentiality clauses generally costs between $1,000 CAD and $2,500 CAD.
- Cease and Desist Letters: If a former employee breaches the clause, a lawyer will charge about $500 to $1,500 CAD to draft and serve a formal warning letter.
- Court Injunctions: If you must go to court to forcefully stop the employee from poaching, emergency injunctions in the Superior Court of Justice can cost $15,000 CAD to $30,000 CAD in initial legal fees.
| Action by Former Employee | Legal Status | Can You Sue for Breach? |
|---|---|---|
| Emails clients offering discounts | Active Solicitation | Yes |
| Posts a general job update on LinkedIn | Public Announcement | No |
| Accepts work from a client who called them | Passive Acceptance | No |
How Long Does the Process Take?
A skilled Ontario law firm can usually draft an airtight non-solicitation clause in 1 to 2 weeks. ⌛ However, if you need to enforce a breached clause, obtaining a court injunction is an emergency procedure that can take several weeks of intense legal maneuvering. It is vital to act immediately if you suspect an employee is stealing your clients.
Frequently Asked Questions (FAQ)
Does a non-solicit prevent the employee from working for a competitor?
No. A non-solicitation clause does not stop an individual from joining a direct competitor or starting their own business. It only prevents them from actively stealing your specific clients and staff when they do so.
Can I use a free internet template for my non-solicitation clause?
It is highly discouraged. Many free templates are based on American laws, which are entirely different from Canadian employment law. An Ontario judge will immediately throw out a poorly drafted, overly broad American template.
What happens if I make the clause apply for 5 years?
If a judge determines your time limit is unreasonable, they will not simply reduce it to 12 months. Under Ontario law, they will strike the entire clause down completely, leaving your business with zero legal protection against poaching.
Can a client choose to leave my business on their own?
Yes. Clients are not your property. If a client finds out an employee left and decides voluntarily to move their business to the employee’s new firm, without any pressure or enticement from the employee, no legal breach has occurred.
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