Non-Solicitation Clauses: The Restrictive Covenant That Actually Survives Court

The Restrictive Covenant Hierarchy

Canadian employment law recognizes three principal types of post-employment restrictive covenants, arranged from most restrictive to least:

Non-compete clauses prohibit the departing employee from engaging in any competitive activity — working for a competitor, starting a competing business, or otherwise competing with the former employer. In Ontario, non-compete clauses in employment agreements have been banned for non-executive employees since October 2021 (ESA, s. 67.2).

Non-solicitation clauses prohibit the departing employee from soliciting specific clients, customers, or employees of the former employer. They do not prevent the employee from working for a competitor — only from targeting the former employer's business relationships.

Confidentiality clauses prohibit the departing employee from disclosing the former employer's confidential information or trade secrets. These are the least restrictive and the most commonly enforced.

The hierarchy reflects a principle of proportionality. Courts are more willing to enforce less restrictive covenants because they impose a smaller burden on the employee's ability to earn a livelihood. A non-solicitation clause that prevents an employee from calling their former employer's clients is less burdensome than a non-compete that prevents them from working in their industry entirely.

The Reasonableness Analysis

Non-solicitation clauses, like all restrictive covenants, are presumed to be restraints of trade and are unenforceable unless the employer can demonstrate that the clause is reasonable. The reasonableness analysis, established by the Supreme Court of Canada in Elsley v. J.G. Collins Insurance Agencies Ltd., [1978] 2 SCR 916, and refined in subsequent decisions, examines three dimensions:

Temporal scope (duration). How long does the non-solicitation restriction last? A restriction of 6 to 12 months is generally considered reasonable for most employees. A restriction of 18 to 24 months may be reasonable for senior employees with deep client relationships. A restriction exceeding 24 months is likely unreasonable unless exceptional circumstances exist.

Geographic scope. Does the non-solicitation clause have a geographic limitation? For non-solicitation clauses (as distinct from non-compete clauses), geographic scope is less critical — the restriction applies to specific relationships rather than to competition in a geographic area. However, a non-solicitation clause that restricts the employee from soliciting clients worldwide may be broader than necessary if the employee's actual client relationships were regional.

Scope of restricted activity. What exactly is prohibited? The clause should clearly define "solicitation" — does it include only active solicitation (the employee reaching out to the client), or does it also include passive solicitation (the client seeking out the employee)? Does it apply to all of the employer's clients or only to clients with whom the employee had a direct relationship?

What Makes a Non-Solicitation Clause Enforceable

Based on Ontario case law, the following features increase the likelihood that a non-solicitation clause will survive judicial scrutiny:

Clear definition of restricted contacts. The clause should specify which clients or employees are subject to the non-solicitation restriction. A clause that restricts the employee from soliciting "any client of the company" is broader than a clause that restricts the employee from soliciting "clients with whom the employee had direct contact during the last 12 months of employment." The narrower clause is more likely to be enforced because it is tailored to the legitimate interest being protected — the employee's personal client relationships.

Reasonable duration. The restriction should last only as long as necessary to protect the employer's legitimate interests. For client relationships, a 12-month restriction is generally sufficient — after 12 months, the client relationship has typically transferred to the employee's successor. For employee solicitation (preventing the departing employee from recruiting former colleagues), 6 to 12 months is typical.

Clear definition of "solicitation." The clause should define what constitutes prohibited conduct. Active solicitation — the employee initiating contact with a former client to invite them to move their business — is the core of the restriction. Passive acceptance — the client independently choosing to follow the employee — is a different matter, and a clause that prohibits passive acceptance may be unreasonable because it effectively prevents the client from exercising their own choice.

Nexus to the employee's role. The restriction should be connected to the employee's actual role and client relationships. A clause that restricts a junior employee with no client-facing responsibilities from soliciting clients is likely unreasonable because the employee poses no competitive risk to those relationships.

Adequate consideration. If the non-solicitation clause is introduced during employment (rather than at the start of employment), it must be supported by fresh consideration — typically a signing bonus, promotion, salary increase, or other tangible benefit. Continued employment alone is generally insufficient consideration for a new restrictive covenant.

What Gets Clauses Struck Down

The following drafting deficiencies commonly lead to non-solicitation clauses being struck down:

Overbroad scope. A clause that restricts the employee from soliciting "all clients of the company and its affiliates worldwide" when the employee worked in a single office and had relationships with a limited number of clients is overbroad.

No temporal limit. A non-solicitation clause with no stated duration, or with a duration tied to an indefinite event ("until the client relationship has terminated"), is unenforceable for uncertainty.

Prohibiting passive acceptance. A clause that prohibits the employee from "directly or indirectly" soliciting clients, where "indirectly" is interpreted to include the client approaching the employee, is unreasonable because it restricts the client's freedom of choice.

Bundled with an unenforceable non-compete. Under the Waksdale reasoning (which applied to termination clauses), there is a question of whether an unenforceable non-compete clause in the same agreement can taint the enforceability of a non-solicitation clause. The case law is not settled on this point, but the risk exists — particularly if the clauses are drafted as a single provision rather than as severable terms.

Vague or ambiguous language. Ambiguity in a restrictive covenant is resolved against the employer (the drafter). A clause that does not clearly define "solicitation," "client," or the scope of the restriction will be interpreted narrowly.

The Non-Solicitation of Employees

Many non-solicitation clauses include a restriction on soliciting the former employer's employees — preventing the departing employee from recruiting their former colleagues to leave and join them at their new employer.

Employee non-solicitation clauses are generally analysed using the same reasonableness framework as client non-solicitation clauses. Relevant factors include the duration of the restriction, the scope of the restriction (all employees, or only employees in specific departments or roles), and whether the restriction applies to solicitation or to hiring (a restriction on hiring a former colleague who independently applies is more burdensome than a restriction on actively recruiting).

Courts have enforced employee non-solicitation clauses where the restriction is reasonable in scope and duration. A 12-month restriction on actively soliciting employees who were in the departing employee's department is likely enforceable. An indefinite restriction on hiring any former employee of the company is likely not.

Practical Guidance

For Employees Leaving a Job

Read your non-solicitation clause carefully. Before you leave, understand exactly what is restricted — which clients, which employees, what conduct, for how long. If the clause is ambiguous, consult a lawyer before taking any action that might violate it.

Do not assume the clause is unenforceable. While many non-solicitation clauses are poorly drafted and may not survive judicial scrutiny, the risk of violating an enforceable clause is significant. The employer can seek an injunction (a court order preventing you from engaging in the prohibited conduct) and can claim damages for any business lost as a result of the solicitation.

Distinguish between solicitation and competition. A non-solicitation clause does not prevent you from working for a competitor. It prevents you from targeting specific clients or employees. You can join a competing firm and serve clients who come to you independently. You cannot call your former employer's clients and invite them to follow you.

Document client origins. If you are in a client-facing role at your new employer, maintain records of how each client relationship originated. If a former client contacts you independently, document the unsolicited contact. This documentation protects you if the former employer alleges that you solicited the client.

For Employees Starting a Job

Negotiate the terms. Non-solicitation clauses are negotiable. If the clause is too broad — covering all clients rather than your clients, lasting 24 months rather than 12 — negotiate it down before you sign. The time to negotiate is before employment begins, when you have the most leverage.

Understand the scope. Ask the employer to confirm which clients and employees are covered. If the clause refers to "clients of the company and its affiliates," clarify which affiliates are included. The more specific the clause, the more predictable your obligations.

The non-solicitation clause is the restrictive covenant that survives — when it is properly drafted, reasonably scoped, and connected to a legitimate business interest. Understanding what makes a clause enforceable protects you whether you are signing one, operating under one, or challenging one.