To legally stop a former employee from competing before a full trial, you must apply for an Interlocutory Injunction in the Ontario Superior Court. You must pass the strict RJR-MacDonald test, proving that your business will suffer “irreparable harm”-damage that money cannot fix-if the employee is not stopped immediately.
When a key executive or top salesperson resigns and immediately joins your fiercest competitor, the survival of your business may be on the line. 🚨 Waiting two to three years for a standard breach of contract trial is not an option when the ex-employee is actively poaching your clients and using your proprietary strategies against you today. You need an immediate court order to force them to stop.
This guide breaks down the complex legal mechanism known as an interlocutory injunction. Whether your corporate headquarters is in Toronto, Hamilton, or Ottawa, Ontario judges are incredibly hesitant to stop someone from earning a living. To succeed, your corporate litigation lawyer must build an overwhelming case that perfectly satisfies the Supreme Court of Canada’s strict legal tests.
Step-by-Step Process in Ontario
Obtaining an injunction is an uphill battle. You are asking a judge to enforce a penalty before the trial even happens. 📍 Here is how your legal team will structure your emergency court application:
Step 1: Review the Contract, ESA Retroactivity, and Federal Rules
Before rushing to court, your lawyer must ensure your non-compete or non-solicit clause is legally valid. Under the Ontario Employment Standards Act (ESA), non-compete agreements are banned for regular employees, but this ban is not retroactive; it only applies to contracts signed on or after October 25, 2021 (as confirmed in Parekh v. Schecter). Agreements signed before this date remain potentially enforceable under strict common law reasonableness rules. Additionally, federally regulated businesses in Ontario (such as telecom, banking, and aviation) are governed by the Canada Labour Code rather than the provincial ESA. Under Bill C-31 (Budget 2025 Implementation Act, No. 2), introduced in May 2026, the federal government has proposed a complete ban on non-compete clauses for federally regulated workers with very narrow exceptions.
Step 2: Apply the RJR-MacDonald Test (Part 1 & 2)
Your lawyer will file an urgent motion in the Superior Court of Justice based on the famous RJR-MacDonald test. 🔍 Generally, the first stage of the test requires showing a “serious issue to be tried.” However, when enforcing restrictive covenants that effectively prevent someone from earning a living before a trial, Ontario courts apply an elevated threshold. As established in Labrador Recycling Inc. v. Folino and Parekh v. Schecter, you must prove a strong prima facie case-meaning you must demonstrate at the very outset that you are highly likely to succeed at trial. Second, you must prove Irreparable Harm by demonstrating with clear, concrete evidence that the employee’s actions will permanently destroy your market share or reputation in a way that monetary damages cannot fix.
Step 3: Prove the “Balance of Convenience” (Part 3)
The final step of the test requires convincing the judge that it is fairer to grant the injunction than to deny it. The judge will weigh the harm to your multi-million dollar business against the harm to the individual employee who might lose their new job. Your lawyer must argue that enforcing the agreed-upon contract is the only equitable outcome to preserve the status quo until the trial.
Step 4: Provide an Undertaking as to Damages
If the judge grants the injunction, the court requires a massive promise from your business. ⚔ You must sign an “Undertaking as to Damages.” This means if you win the injunction today, but two years from now you lose the final trial, your business agrees to financially compensate the ex-employee for all the wages and opportunities they lost because you wrongfully forced them out of work.
How Much Does it Cost in Ontario?
Seeking an interlocutory injunction is a high-stakes, fast-paced legal maneuver that requires a massive injection of cash. 💰 As of 2026, here is an estimate of the financial commitment in CAD:
- Emergency Injunction Motion: Preparing the extensive affidavits, drafting the legal factum, and arguing the motion in court typically requires an upfront legal retainer of $25,000 to $50,000+ CAD.
- Cost Consequences: In Ontario, if you ask a judge for an injunction and lose the motion, you will likely be ordered to pay a portion of the ex-employee’s legal fees, which can cost your business an unexpected $10,000 to $20,000 CAD.
- Full Trial Costs: The injunction only pauses the bleeding. You still have to fight the actual lawsuit. Taking a breach of non-compete case to a final trial easily costs $75,000 to $150,000+ CAD.
| The RJR-MacDonald Test | What You Must Prove | Difficulty Level |
|---|---|---|
| 1. Strong Prima Facie Case | An exceptionally clear and convincing case that the restrictive covenant is valid and breached | High / Extreme (Elevated threshold for restraints of trade) |
| 2. Irreparable Harm | Permanent loss of market share or reputation | Extreme (Must provide hard evidence) |
| 3. Balance of Convenience | The business will suffer more than the employee | High (Judges favour the individual’s right to work) |
How Long Does the Process Take?
Injunctions are designed for speed. ⏳ While a standard lawsuit takes years, a motion for an interlocutory injunction can usually be heard by an Ontario judge within 2 to 6 weeks of the employee resigning, depending on the urgency and court availability. If the judge grants the order, it takes effect immediately and typically lasts until the final trial takes place, forcing the employee to sit on the sidelines for 1 to 2 years.
Frequently Asked Questions (FAQ)
What happens if the employee ignores the injunction?
If an Ontario judge grants an injunction and the ex-employee continues to work for the competitor or contact your clients, they are in direct contempt of court. Your lawyer can file a motion to have them heavily fined or even sent to jail.
Can I stop an employee if they didn’t sign a non-compete?
Yes, but only if they were a high-level executive or “fiduciary” of the company. Even without a written contract, Canadian common law prohibits key executives from resigning and immediately soliciting your clients or exploiting your corporate opportunities.
Does the ESA ban on non-competes ruin my case?
Not necessarily. The ESA ban on non-competes only applies to contracts signed on or after October 25, 2021, and is not retroactive. If your employee signed their agreement before that date, it remains potentially enforceable under common law. If signed after, you cannot enforce a non-compete unless they are a chief executive, but you can still seek an injunction to enforce a valid “Non-Solicitation” clause instead.
Will the new employer be held responsible?
Yes. Your lawyer will almost always name the new competing business as a co-defendant in the lawsuit. You will sue them for “inducing breach of contract,” claiming they knowingly hired your employee to exploit your confidential information.
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