Careers

Non-compete clause

  • Last Updated:
  • Jul 11th, 2012 10:11 pm
[OP]
Sr. Member
User avatar
Oct 12, 2005
724 posts
16 upvotes
Toronto

Non-compete clause

I'm currently a working individual, and is recently gotten possible opportunities with companies that are in the same industry as I am currently working in. I'm just wondering what is the implications of a non-compete clause?? I've googled it and it seems that in Canada, the non-compete clause only works in extreme situations such as stealing proprietary formula or taking a copy of the company's client list with you. Most of the time, it does not seem to apply because of the fact that you can't make a "reasonable living" if the non-compete clause is enforced. I believe this is especially true for professionals because after a while, they become familiar with the industry and gain contacts through networking opportunities, and also it will be hard for the individual to switch to a completely different industry!

So my question becomes, why is most non-compete clauses pretty generic?

Mines is a little difficult to understand (probably the case with most legal writing), that in the same long sentence (almost a paragraph in length) it mentions both 6 months and 12 months post-termination.

I'm just looking for some advice as I am currently unhappy with my current company and is looking to move on. But it's hard to do since if the non-compete clause applies, then I can't work in the same industry for at least 6 months post-termination. But I assume this is arguable in a court of law as I cannot make a "reasonable living" if that's the case.
10 replies
Deal Addict
Sep 30, 2008
1277 posts
310 upvotes
I believe in many jurisctions say that employers cannot deny an ex employee from finding a reasonable living. Google it, and u will find the court cases will be on your side if the employers bother to sue. But, you should not approach those customers your have worked on, or you "steal" any company information (trade secrecy) when u leave.

I research this issue when College Pro asked my son to to sign this non compete clause in year one, and then he wanted to worked for another competitor next year.
Deal Addict
Jun 29, 2009
2307 posts
211 upvotes
Toronto
No company can stop you to make a move even to a competitor. As long as you don't steal any information, solicit any client and the likes.
Deal Fanatic
User avatar
Jul 19, 2003
8087 posts
719 upvotes
damnos wrote: No company can stop you to make a move even to a competitor. As long as you don't steal any information, solicit any client and the likes.
many modern non-competes will say otherwise. they will specifically refer to the person "working again" in the same industry within 6-12 months

I don't think they hold up in court at all though, they're such nonsense
[OP]
Sr. Member
User avatar
Oct 12, 2005
724 posts
16 upvotes
Toronto
damnos wrote: No company can stop you to make a move even to a competitor. As long as you don't steal any information, solicit any client and the likes.
From what I've read online and heard from other people, that is pretty much the case. And I believe mines is similar. For sure stealing information and soliciting clients won't be my case. But what if the new company (competitor) already have similar client base? And the new company is also currently with one of the same clients, but even though my current company is working with them, I've never been assigned to them. So would you call them soliciting if the client is already a clientele of the competition as well?
[OP]
Sr. Member
User avatar
Oct 12, 2005
724 posts
16 upvotes
Toronto
masterhapposai wrote: many modern non-competes will say otherwise. they will specifically refer to the person "working again" in the same industry within 6-12 months

I don't think they hold up in court at all though, they're such nonsense
That's what I think too. And from what I've read online, seems to also be the case.
Deal Addict
Feb 5, 2010
2764 posts
178 upvotes
masterhapposai wrote: many modern non-competes will say otherwise. they will specifically refer to the person "working again" in the same industry within 6-12 months

I don't think they hold up in court at all though, they're such nonsense
They don't because a ton of my peers switched companies from lets say TD to RBC, Scotia to BMO etc. None of they had any issues at all.
Jr. Member
Feb 15, 2012
175 posts
17 upvotes
Yeah they're not meant to stop you from working for a competitor, but rather to divulge trade secrets to that competitor. In my field (IT consulting) we have a non compete clause that prevents whatever client we are working for, from poaching us within 6 months of ending work there.
Deal Addict
Mar 24, 2005
1360 posts
112 upvotes
Usually there's a period where you cannot poach your former colleagues and a period where you cannot work for the same client of your former company. By client, this usually refers to the same individual rather than organization. Even with these there are grey areas for example, you can work for the same client but on a different engagement if your new firm have an existing relationship with that client to begin with.

Basically, the idea is that you cannot work for someone for which you would not have gotten that relationship without being employed by your former company. You cannot cause loss revenue to your former company.
Deal Addict
Mar 24, 2005
1360 posts
112 upvotes
Abel4Life wrote: They don't because a ton of my peers switched companies from lets say TD to RBC, Scotia to BMO etc. None of they had any issues at all.
But 99% of the roles at banks do not require any individual to sign an actual non-compete. There are employee rules of conduct that you may have to sign but it's only limited to how you cannot work for a competitor at the same time. There would not be a non-compete agreement or clause as part of your offer of employment.
Deal Addict
User avatar
Mar 29, 2008
3450 posts
625 upvotes
There's a difference between non-competes and non-solicits. Both can be enforceable in Ontario under certain conditions, but non-solicits are much more likely to be upheld...

Top