The CIPPIC Summer Speaker Series Tackles Non-Compete Clauses

Receiving a new job offer is often an exciting moment. Yet for some Canadians, this excitement is rapidly tempered by a non-compete clause buried in their old employment contract that dashes any hope or possibility of taking the new job. Such clauses can prevent employees leaving a job from working for a competitor or starting a competing business for a certain period of time and/or within a certain geographic area. While seemingly affecting only individual employees, the use of such provisions in employment contracts raises broader social issues.

To unpack the implications of non-compete agreements, CIPPIC hosted a panel of experts on June 25, 2025, at the University of Ottawa Faculty of Law. The panel featured Benoit Régimbald, a legal scholar from McGill University; Keldon Bester, Executive Director of the Canadian Anti-Monopoly Project; and Matthew Chiasson, a Senior Policy Advisor at the Competition Bureau[1].

How Prevalent Are Such Agreements?

The panel explored how non-competes exert a significant chilling effect on worker mobility, suppress wages, and hinder both innovation and competition in the Canadian economy. Although Canadian data is sparse, a 2024 Angus Reid survey highlighted the use of these agreements: 27% of surveyed Canadian workers reported being subject to a non-compete clause[2]. Research from Australia also shows non-compete clauses are prominent among entry-level workers such as personal service workers, clerical, and administrative staff[3]. Similarly, data from the US found a strong prevalence of non-compete clauses among low-wage workers[4].

Who Is Most Affected?

During the panel discussion, the panellists emphasized that non-compete clauses disproportionately harm low-wage and entry-level workers. For example, Chiasson noted that in one B.C case involving a seasonal window cleaner, the employer filed for an injunction after the employee left to start a competing business[5]. Ultimately, the court dismissed the employer’s injunction request after finding out the employee had no access to client lists and previous clients did not recall interacting with that employee in his previous role[6]. Other cases discussed during the panel referred to precariously employed workers such as a travel agent in Lethbridge, a tattoo artist in Saskatchewan, and a wedding planner in PEI[7].

The panellists raised concerns about non-compete clauses for low-wage, entry-level workers, noting that these employees are unfairly restricted in the job market, reducing employers’ incentives to offer competitive wages. The panellists also challenged the argument that non-competes are necessary to protect legitimate business interests, noting less restrictive alternatives such as non-disclosure agreements (NDAs) can safeguard confidential information without unduly restricting worker mobility.

The discussion underscored that when workers are unable to move freely between jobs, employers face less pressure to offer competitive wages, ultimately stifling economic growth and innovation – a particularly significant issue in the climate of present Canada-U.S. relations.

Enforcement Challenges

The enforcement of non-compete clauses remains a critical issue. The current legal framework often leaves workers with few avenues to challenge these clauses, especially given the knowledge gap about the limits of their enforceability and the resources required to mount a legal challenge to any attempted enforcement. According to research from the U.S., approximately 40% of workers have turned down a job offer from a competitor because of a non-compete clause, even though they worked in a U.S. state where the non-compete clause was non-enforceable[8].

While opponents of reform argue that non-competes are necessary to protect trade secrets, our expert panel highlighted several opportunities to not just overcome this barrier but improve competition and worker mobility. Following the lead of Ontario’s 2021 ban and reforms in numerous U.S. states, it may be time for a national conversation to unlock worker mobility, foster innovation, and build a more competitive Canadian economy.

Reform on the Horizon?

In Canada, there has been little effort or movement to restrain non-competes, except for Ontario. In 2021, Ontario became the first jurisdiction in Canada – and, so far, the only one – to ban non-compete clauses. But with the recent push toward harmonization of Canadian laws and the dismantling of barriers to economic mobility and trade, the moment may be ripe for change.

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[1] Mr. Chiasson attended the session in a personal capacity.

[2]Angus Reid Institute, “Labour Mobility: By two-to-one margin, Canadians support banning non-compete clauses” (11 January, 2024) online: https://angusreid.org/canada-ontario-non-compete-clauses-labour-contracts-law/.     

[3]Dan Andrews and Bjorn Jarvis, The ghosts of employers’ past: how prevalent are non-compete clauses in Australia?(Surry Hills: e61 Institute, 2023).

[4] Evan P. Starr, J.J Prescott, and Norman D. Bishara, “Noncompete Agreements in the US Labor Force” (2021) 64:1 the Journal of Law and Economics, 53-84.

[5] See Thru Window Cleaners Inc. v. Mahood, 2016 BCSC 2134.

[6] Ibid at 51-52.

[7] The Travel Company Ltd. v. Keeling, 2009 ABQB 399; Dennis Cantelo v Adam Paton, 2011 SKPC 186; Dream Weavers v Astley, 2000 PESCTD 32.

[8] Dan Andrews and Andrea Garnero, Five Facts on non-compete and related clauses in OECD countries (Paris: OCED, 2025).