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.
A non-competition clause (or non-compete clause) is a passage in an employment contract which purports to prohibit employees from working for another employer or starting their own business which competes with their employer during and after employment.
Canadian startups and any company for that matter should have an employment contract for all new hires. An employment contract helps both parties understand the employment relationship, protects the start up in the event of the termination of employees and it can also serve as a useful mechanism to attract good employees.