Employers often create agreements with employees that contain non-solicitation and non-competition clauses. Sometimes these non-solicits and non-competes are enforceable against employees in Alberta, but often they are not.
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Many employment contracts and employment policy manuals contain Non-Solicitation and/or Non-Competition clauses. These clauses are also known as “restrictive covenants”. These are sometimes enforceable against employees in Alberta, but often they are not.
A very basic example of a non-solicitation clause is, “Employee shall not solicit the clients of Employer for a period of 12 months after termination of employment for any reason.”
A very basic example of a non-competition clause is, “Employee shall not be employed in the horseshoe manufacturing business in Calgary for a period of 12 months after termination of employment for any reason.”
Alberta courts do not like to enforce non-solicitation and non-competition clauses against employees, because they are what is known as “restraints of trade”: they can prevent labor mobility and can prevent someone from making a living, both of which are undesirable in a generally free society.
As a result, employers are only allowed as much protection with these kinds of clauses as is reasonable in a given situation.
Ask a Lawyer about your Non-Compete Agreement
Generally speaking, courts do not consider it to be “reasonable” to hold lower-level employees to either non-solicitation or non-competition contracts, because the employers are not sufficiently vulnerable to the actions of those employees to justify that sort of protection. Upper management and executive employees can sometimes be held to non-solicitation or non-competition agreements, but even then, only when the protective clauses are drafted narrowly so that the employer does not get more protection than it actually needs.
Often, if a court determines that a non-solicit agreement or a non-compete agreement was too broad or meant to excessively protect the employer, the court will strike it out and refuse to enforce it. We can provide you legal advice on whether a non-solicitation or non-competition clause in an employment agreement is likely to be enforceable and/or what you can and cannot do.
Cautionary Notes
- If an employee breaches a non-solicit or non-compete agreement and it turns out to be enforceable, the employee could be sued and could be liable for a substantial sum of money.
- Analyzing these clauses and whether they would be enforceable in a given situation is difficult, but the lawyers at Bow River Law are skilled and experienced at providing advice to employees and employers on non-solicitation and non-competition agreements in Alberta.
- If you intend to engage in solicitation of former clients, employees, suppliers, etc., and you have a non-competition or non-solicitation clause in your employment contract or policy manual, give us a call and let us help you understand your rights and risks. We provide non-solicitation advice for employees in Calgary and throughout Alberta.
- If you intend to compete with your former employer and you have a non-compete or non-solicit clause in your employment contract or policy manual, give us a call and let us help you understand your rights and risks. We provide non-competition advice for employees in Calgary and throughout Alberta.
- Even if you do not have these clauses in your employment contract or policy manual, if you intend to solicit or compete you should speak with a lawyer first, because employees have certain obligations to their employer that go beyond the written contract, and you should be aware of those before it is too late.
Non-Competition / Non-Solicitation FAQ
I left my employer. Can I compete with them now?
In many cases, you can compete with your former employer after you leave. This depends partly on whether you have signed a non-competition agreement or non-solicitation agreement, and partly on the position you had with your former employer. Certain high-up positions or client-facing positions have some obligations after leaving an employer, even if they have not signed a non-compete or non-solicit. Even if you signed a non-compete or non-solicit, it might not be enforceable. A skilled and experienced employment lawyer can help you understand your rights on this.
I want to leave my employer. Can I take my clients with me?
Sometimes you can take clients with you when you leave, but in many cases you cannot. If you make the wrong call on this you could be sued by your former employer, so you should get advice from an employment lawyer before trying this.
I just received a threatening letter from my former employer which says I need to “cease and desist” contacting clients and working for a competitor or they will sue me. What should I do?
I just received a threatening letter from my former employer which says I need to “cease and desist” contacting clients and working for a competitor or they will sue me. What should I do?
Non-Competition / Non-Solicitation Legal Blog Articles
Alberta Fiduciaries, Confidential Information and Non-Solicitation
In People Corporation v 2578649 Alberta Ltd., an Alberta Court refused non-comp and non-solicit injunctions, but granted a 12 month fiduciary non-solicit
Restrictive Covenant Not Enforced Against Consultants
In NL Fisher Supervision & Engineering v Bottger, the Alberta Court of Justice ruled restrictive covenants in consulting agreements were ambiguous and unreasonable.
Non-Comp Injunction Application Re Former Shareholder Denied
In ARC Surveys Ltd v Ni, a surveying company failed to get a permanent injunction preventing the involvement of a former shareholder with a competitor.
No Consideration Kills a Restrictive Covenant
In Great North Equipment v Penney, 2024 ABKB 533, the Alberta Court of KB considered an injunction application to enforce non-compete and non-solicit clauses.
No Injunction For Soliciting Employees and Bidding on Prior Opportunity
In Southwest Design & Construction v Janssens, a former employer was unable to get an injunction regarding solicitation of employees and clients
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