Non Solicitation vs Non Compete in Ontario: What Actually Matters

Non solicitation and non compete clauses are often grouped together.

In practice, they are treated very differently.

The distinction is not just technical. It determines whether the clause will actually be enforceable.

In Ontario, many non compete clauses fail. Non solicitation clauses are far more likely to hold up, but only if they are drafted properly.

The Real Difference Is How Restrictive the Clause Is

A non solicitation clause is targeted.

It prevents someone from going after specific relationships connected to the business.

This usually includes clients, customers, or employees.

A non compete clause is broader.

It restricts someone from participating in a competing business altogether.

That difference is what drives how courts treat these clauses.

What Non Solicitation Looks Like in Practice

A properly drafted non solicitation clause focuses on conduct.

It restricts active steps.

For example:

• contacting clients to move their business

• reaching out to employees to recruit them

• targeting relationships developed through the business

Where this becomes important is in enforcement.

Courts will often look closely at whether there was actual solicitation.

If a former client reaches out on their own, that is not always a breach.

We regularly see disputes turn on this exact issue.

The clause needs to clearly define what constitutes solicitation. Otherwise, it becomes difficult to enforce.

What Non Compete Clauses Actually Do

A non compete clause goes further.

It restricts someone from working in or operating a competing business.

This may include:

• working for a competitor

• starting a competing business

• operating within a defined geographic area

This type of restriction directly impacts someone’s ability to earn a living.

That is why courts treat it differently.

Why Most Non Compete Clauses Fail

In Ontario, non compete clauses are not automatically enforceable.

They are viewed as restrictive and are only upheld where they are clearly justified.

We regularly see clauses fail because:

• the geographic scope is too broad

• the time period is longer than necessary

• the restriction is not tied to a specific business interest

• the language is vague or overly general

If the clause goes further than necessary, there is a real risk that it will not be enforced at all.

Courts do not rewrite these clauses. If they are unreasonable, they are often set aside.

When Non Compete Clauses Are More Likely to Work

Context matters.

Non compete clauses are more likely to be enforced in the sale of a business than in employment relationships.

The reasoning is practical.

In a business sale, the buyer is paying for goodwill and expects protection from immediate competition by the seller.

In employment, the threshold is higher.

The business must show that a non solicitation clause is not sufficient to protect its interests.

This is where many clauses fall short.

Where Businesses Get This Wrong

We regularly see agreements that include both clauses without any real distinction.

This creates problems.

For example:

• a non compete clause is included by default, without justification

• a non solicitation clause is drafted too broadly and becomes difficult to enforce

• the restrictions do not reflect the actual risk to the business

In these situations, the clauses may provide less protection than expected.

Drafting Is Where This Is Won or Lost

These clauses are not about including standard language.

They need to be tailored to:

• the nature of the business

• the role of the individual

• the relationships being protected

A clause that is too broad creates risk.

A clause that is too narrow may not provide meaningful protection.

The goal is to strike the right balance so that the clause is both enforceable and effective.

What Actually Matters

The question is not whether you have a non solicitation or non compete clause.

The question is whether it will hold up when it is challenged.

That comes down to:

• how it is drafted

• whether it is reasonable

• whether it reflects a legitimate business interest

Without that, the clause may look strong on paper but provide little protection in practice.

Book a Consultation

If you are including restrictive covenants in an agreement or reviewing an existing clause, it is important to assess whether they are actually enforceable and aligned with your business.

These clauses are highly sensitive to drafting and context. A focused review can identify whether the restrictions are appropriate and where adjustments may be needed, and you can Book a Consultation to walk through your agreement and structure these provisions properly.