Non-Compete and Non-Solicit Clauses in BC Employment Contracts

Many BC employment contracts include a clause limiting what an employee can do after leaving: not working for a competitor, not approaching clients, not hiring away co-workers. Employers rely on them; employees often wonder whether they mean anything.

The answer depends on the wording. This guide explains how courts approach these restrictive covenants, why narrow non-solicit clauses usually fare better than broad non-competes, where legislation stands in 2026, and what to do if you are drafting or facing one.

The starting point: restraints on work are suspect

A clause that limits what someone can do after their job ends is a restraint of trade. Courts generally treat these clauses as unenforceable unless the employer shows they are reasonable and clearly worded. That reflects a policy that people should be free to earn a living and that the public benefits from competition.

Courts are stricter with employment contracts than with business sales. In Shafron v. KRG Insurance Brokers (Western) Inc., 2009 SCC 6, a case about a Vancouver insurance broker, the Supreme Court of Canada applied more rigorous scrutiny to a restrictive covenant in an employment setting. An employee usually has less bargaining power than someone selling their business, and losing the ability to work matters more.

Non-compete and non-solicit: what is the difference?

• Non-compete. Stops the former employee from working for a competitor, or starting a competing business, for a period and within an area.
• Non-solicit. Stops the former employee from approaching the employer's clients or customers, and sometimes employees, for a period. They can still work in the industry.
• Non-dealing. A middle ground: the former employee cannot do business with certain clients, even if the client approaches them.
• Confidentiality. Protects trade secrets and confidential information, with no time limit needed for truly confidential material.

Because a non-compete is the most restrictive, courts often ask whether a narrower clause, such as a non-solicit, would have protected the employer's legitimate interests. If it would have, a non-compete is at real risk.

What makes a clause more likely to hold

Courts look at the whole clause in context. The questions usually include:

• A legitimate interest. Is the employer protecting something real, such as client relationships or confidential information, rather than simply avoiding competition?
• Duration. Is the time period no longer than needed to protect that interest?
• Geography. Is the area clear and tied to where the employee actually worked or had clients?
• Activity. Does the clause target the work the employee actually did, rather than an entire industry?
• Clarity. Can the employee tell exactly what they may and may not do?

Clarity is where many clauses fail. In Shafron, the clause covered the "Metropolitan City of Vancouver", a term with no settled meaning. The Court held that an ambiguous restrictive covenant is prima facie unreasonable and unenforceable, and it refused to rewrite the clause to fix the problem. Courts will not read in a reasonable area or period for the employer; they may strike out a trivial part only in narrow circumstances. So an over-broad or vague clause can leave an employer with no protection at all.

Has BC banned non-compete clauses?

No. As of the Employment Standards Act consolidation current to October 6, 2026, BC's employment standards legislation contains no ban on non-compete or non-solicit clauses. Their enforceability in BC remains a matter for the courts, as described above.

Two related developments are worth knowing about:

• Federally regulated employers. In May 2026, the federal government introduced budget legislation proposing to ban most non-compete clauses in employment contracts in federally regulated industries. As of mid-October 2026 it had not become law. If your business is federally regulated, check the current status before relying on a non-compete.
• Agreements between employers. Under s 45(1.1) of the Competition Act, it is a criminal offence for employers who are not affiliated with each other to agree to fix wages or terms of employment, or not to solicit or hire each other's employees. That rule is about deals between businesses, not ordinary clauses with your own employees, but it matters for no-poach terms in contracts with competitors or partners.

Practical tips for employers

• Start with confidentiality and non-solicit clauses; use a non-compete only where the role truly justifies it, such as senior staff with deep client relationships.
• Tailor clauses to the role, rather than using one template for every employee.
• Define every term, including the area, the clients covered and the period.
• Put the clause in the offer before the employee starts. Adding a restriction to an existing employee's contract can raise questions about whether they received anything in exchange for it.
• Review your templates regularly.

Our legal checklist for hiring your first employee in BC covers the rest of the employment agreement.

If you are an employee who is leaving

Read the clause carefully before you resign, and keep copies of your contract. Do not take client lists or confidential files with you. Employers who believe a clause has been breached may ask a court for an injunction, so get advice on what the clause actually restricts before you accept a new role or contact former clients.

Need restrictive covenants that fit your business?

Our business lawyers can review your employment agreements, draft confidentiality, non-solicitation and, where justified, non-competition clauses tailored to each role, and update your templates as the law changes.

Call 604-259-2844 or send us a message to arrange a consultation at our Vancouver office.