On June 23, 2023, new prohibitions on non-solicitation agreements will come into force based on amendments to s. 45 of the Competition Act (the “Act”). Under ss. 45(1.1)(b) and 45(2) of the Act, unaffiliated employers who agree not to solicit each other’s employees may be guilty of an indictable offence and liable on conviction to imprisonment of less than 14 years, a fine in the court’s discretion, or both.
Conflicts between employers and fiduciary employees most commonly arise where the individual has sought for herself a business advantage which should have accrued to the employer or attempted to solicit clients and/or misused confidential information following the end of the employment relationship.
Many employment agreements contain non-competition clauses that seek to prevent an employee from later working for a competitor. Employers who rely on these clauses should exercise caution before seeking to enforce them at court.