While Ontario has legally banned most non-compete agreements, “non-solicitation of employees” clauses remain entirely legal and enforceable. If you quit your job and actively try to poach your former colleagues for your new business, your previous employer can sue you for breach of contract and severe financial damages.
Starting a new business or joining a growing startup in tech hubs like Markham, Toronto, or Waterloo is an exciting venture. Naturally, when you leave your old job, you might want to bring your favourite, high-performing colleagues with you to build your new team. After all, you know their skills and work ethic firsthand.
However, many professionals misunderstand recent changes to Ontario labour law. 💵 While the *Working for Workers Act* banned companies from stopping you from joining a competitor, it did absolutely nothing to ban non-solicitation clauses. If you signed a contract promising not to poach staff, reaching out to a former coworker on LinkedIn and offering them a job can trigger a devastating civil lawsuit. This guide explains the boundaries of solicitation, how to hire legally, and the immense risks of breaking your contract.
Step-by-Step Guide to Hiring Former Colleagues Safely
If you need to staff your new venture but want to avoid a lawsuit from your previous employer, you must tread incredibly carefully. Follow these steps to understand your legal boundaries.
Step 1: Locate Your Signed Employment Contract
Before you send a single text message to a former coworker, dig out the employment contract you signed with your old boss. 🔍 Look for a “Non-Solicitation” clause. Read the exact wording carefully. It usually states that for a specific period (e.g., 12 to 24 months after resignation), you cannot directly or indirectly encourage, induce, or solicit any employee to leave the company.
Step 2: Understand the Difference Between Soliciting and Competing
It is perfectly legal for you to work for a competitor in Ontario. It is also perfectly legal for your former colleague to quit their job and join you of their own free will. The legal issue is the inducement. If you take the first step by inviting them for coffee to pitch your new company, you are soliciting. You have breached the contract.
Step 3: Use Only Public Job Postings
If you want to hire former colleagues safely, use general, public advertising. 🗂 Post the job opening on public platforms like Indeed, LinkedIn, or your company website. If a former coworker sees the public post, applies on their own initiative without any prompting from you, and asks for an interview, this is generally not considered solicitation by Ontario courts.
Step 4: Keep Written Evidence of Unprompted Contact
If a former colleague reaches out to you asking for a job, you must document it. Save their initial email or LinkedIn message showing that they initiated the contact. If your former employer accuses you of poaching, this written paper trail is your best defence to prove that you did not solicit them.
Step 5: Be Wary of Fiduciary Duties
If you were a C-suite executive, a director, or a key senior manager at your old company, the rules are much stricter. “Fiduciary employees” owe a profound duty of loyalty to their former employer, even if they never signed a formal non-solicit clause. Fiduciaries are strictly prohibited from gutting their former company’s workforce to benefit their new venture.
How Much Does it Cost in Ontario?
Poaching staff in violation of a contract is not a minor HR issue; it is a serious legal liability. 💰 Here is a look at the massive costs involved in solicitation disputes.
- Lawyer Consultations: Hiring an employment law firm to review your old contract before you start hiring costs roughly $350 to $700 CAD per hour. It is a vital investment.
- Civil Damages: If your former employer successfully sues you, you may be ordered to pay for the cost of recruiting and training replacements, as well as the lost profits caused by the departure of key staff. This can easily reach tens of thousands of dollars.
- Injunction Costs: Your former employer can file for an immediate court injunction to legally block you from hiring their staff. Defending an injunction in the Superior Court of Justice is incredibly expensive, often costing $20,000 to $50,000 CAD in legal fees alone.
Comparing Hiring Practices in Ontario
| Hiring Action Taken | Is it Solicitation? | Legal Risk in Ontario |
|---|---|---|
| Texting a coworker: “We are hiring, want to join?” | Yes (Direct inducement) | Extreme Risk (Clear breach of contract) |
| Posting a job publicly on LinkedIn | No (General advertising) | Low Risk (Safe practice) |
| Telling a coworker to check your job board | Yes (Indirect inducement) | High Risk (Still considered poaching) |
| Coworker emails you unprompted asking for a job | No (Candidate initiated) | Low Risk (Keep the email as proof) |
How Long Does the Process Take?
Non-solicitation clauses are strictly time-bound. Most employment contracts in Ontario enforce the non-solicit ban for 12 to 24 months following your departure. Once that time expires, you are generally free to recruit anyone you want. If an employer catches you poaching before the expiry, they can file an emergency injunction within a matter of days or weeks to shut down your hiring efforts.
Frequently Asked Questions (FAQ)
Did the Ontario government ban non-compete clauses?
Yes, the Working for Workers Act banned non-compete agreements for most regular employees (excluding C-suite executives) hired after October 25, 2021. However, the law explicitly states that non-solicitation clauses for both clients and employees remain perfectly legal.
Can I just tell my coworkers I am leaving?
Yes. Sending a polite, factual “goodbye” email stating that you are moving on to a new opportunity is legally permitted. However, you must not use that email to encourage them to follow you or leave the company.
What if my old company fired me without cause?
If an employer wrongfully dismisses you and breaches the employment contract by failing to provide proper severance, courts will often rule that the employer cannot then enforce the non-solicitation clause against you. You should consult a lawyer to confirm this before acting.
Does a non-solicit apply if my coworker hates the old boss?
Yes. The coworker’s personal feelings about the company do not matter. If you are bound by a non-solicitation clause, you cannot be the one who encourages or induces them to finally quit, even if they were already unhappy.
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