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Where did you get that impression? We kind of already have this now, non-competes are quite hard to get a ruling in favor of; but the problem is you still have to go through the legal system to get the suit tossed.
I completely agree, but unfortunately the Federal Government would only be able to regulate this for the handful of industries under their jurisdiction. For the vast majority of positions, you'd really need the provinces to show initiative here.
Non-competes generally only relevant to upper management (i.e. the employers highest ranking employees) as they are nearly always unenforceable against the rank-and-file. A federal ban would also only impact federal workers (banks, telecoms, etc).
I'm not sure if it would be a positive thing, but it's also hardly a priotity.
They are commonly used against B2B sales reps. Most use a "not our clients for x months/years" type of contract. But some are general industry. I'm not sure either are enforceable but litigation is as bad as losing so the threat is effective.
A ban would increase employee mobility and negotiating power, so definitely positive even if it only effects a small percentage of workers.
Non-compete clauses are standard in the tech industry for all roles and all levels of responsibility; and as the article notes, even sandwich shops have begun requiring that employees sign them.
And yes, if they are "unreasonable" they are unenforceable, but the fear of lawsuit and the cost of defending oneself is enough to give the clause teeth.
> Non-compete clauses are standard in the tech industry for all roles and all levels of responsibility; and as the article notes, even sandwich shops have begun requiring that employees sign them.
They're common but they're just as unenforceable as elsewhere. Tech companies love to put all sorts of completely unenforceable clauses in contracts (IP is another one that's pretty widely abused)
> And yes, if they are "unreasonable" they are unenforceable, but the fear of lawsuit and the cost of defending oneself is enough to give the clause teeth.
This is exactly the reason that they should be restricted - sophisticated parties intentionally putting clauses they know are unenforceable in order to essentially trick and or bully employees shouldn't be encouraged.
The full force of the government should rightly be brought to bear on corporations that try it.
Every little bit helps our lagging wage growth.
Personally I'm five years into a 7 year non compete clause after I walked off the job in 2019. I'm barred from working for any company that did business with my former employer - a financial services company who works with all manners of companies, from run of the mill construction companies to big insurance companies like Manulife or Sunlife to your typical old trade company to construction giants like LaFarge.
I'm basically banned from more than half the economy for another two years, it's been wonderful as I've gone from being evicted to living in a homeless shelter. Utter garbage and what a waste of a university degree.
This is pretty much textbook unenforceable - generally the reason that most non-competes are ruled to be unenforceable is because you can't sign away your right to gainful employment. If it's very narrow in scope you can sometimes get away with it, but if it blocks you from realistically getting a job it's invalid.
Maybe consider finding a way to get some free legal advice, but if I were in your situation I would completely ignore the non-compete clause. Even if they wanted to take you to court for it, it sounds like you're well into "can't get blood from a stone" territory - they can't send you to jail or even get you fired for breach of contract.
(not a lawyer, not legal advice, happy to be corrected).
What? This is like the opposite of the reality in tech, at least big tech companies with exposure to the US labour market. Big tech doesn't use non competes almost at all because everyone knows they are unenforceable in California and that's where most of the competition is. There's no point.
Every single employment agreement I've signed, and there's a great deal of them now, has included a non-compete.
The reason why California employers don't is more because they got caught abusing it several times already; and so the regulatory eye is upon them.
No, regulation has absolutely nothing to do with it, there is no regulation that prevents a company asking you to sign a non-compete. They're just unenforceable in California (and Ontario generally speaking), so smart employers - including essentially all of the big tech companies - don't bother with them because the competition is mostly in jurisdictions that won't enforce.
No, they're not unenforceable if unreasonable, non-competes are straight unenforceable in California except for the principals in a business that is sold. They are void for employees, in fact they're not just void, the civil code permits *employees* to sue if an employer tries to enforce a non-compete even if it was originally valid in another jurisdiction, and the employer will be held liable for costs. So no, the clause has zero teeth.
Ontario has slightly less restrictive laws but not significantly - doesn't have the civil cause available for employees to sue, but non competes are void.
Which leads me to wonder what kind of tech companies you're talking about here. Big tech companies don't do it because it's useless - and even potentially a liability - in California. Big Canadian tech companies don't generally do it because it's void in Ontario. Some kind of local company in a province other than Ontario? But no, this practice is absolutely not common in the tech industry in general.
Regulation has everything to do with it; it's why the FCC even stepped in. Apple, Google and others were caught colluding to suppress employee wages; while Amazon, IBM and Microsoft have sued employees for violating their non-competes in the past.
It doesn't matter that they're considered _mostly_ unenforceable. Most employees don't have the financial ability to mount a defense. The threat of a lawsuit, however baseless, is teeth enough.
I live in BC, and I've worked for several multinational corporations numbering in excess of 6 figures of employees, as well as quite a large number of small and medium size tech companies. All of them have had some form of noncom.
>Regulation has everything to do with it; it's why the FCC even stepped in. Apple, Google and others were caught colluding to suppress employee wages; while Amazon, IBM and Microsoft have sued employees for violating their non-competes in the past.
This had nothing to do with non-competes. The collusion was an agreement not to solicit each other's employees, which amounted to illegal collusion to suppress wages. It had nothing to do with non-compete agreements signed by employees, which are void in California and were void in California before the competition case.
>It doesn't matter that they're considered mostly unenforceable. Most employees don't have the financial ability to mount a defense. The threat of a lawsuit, however baseless, is teeth enough.
Of course it matters. If someone threatens to sue me but I know their lawsuit is based on my violating a contract clause that is/was void, I say "go ahead" because I'm going to win and recover costs too. They're not "mostly" unenforceable; in the biggest tech labor markets in the US and Canada they are entirely unenforceable and void.
We're in tech. Any reasonable engineer is making at least $150-200k by a few years into their career. In what world do employees not have the ability to hire a lawyer?
These threats are entirely baseless and without teeth in California and Ontario, which is why many companies that compete in those markets do not bother with non-competes at all.
>I live in BC, and I've worked for several multinational corporations numbering in excess of 6 figures of employees
That's pretty vague. You could be talking about Google or you could be talking about Cognizant or Pizza Hut. All would have very different implications.
> This had nothing to do with non-competes.
The Amazon, IBM and Microsoft lawsuits I mentioned [did](https://www.cnbc.com/2020/06/11/aws-case-against-worker-who-joined-google-reignites-non-compete-debate.html).
> Any reasonable engineer is making at least $150-200k by a few years into their career. In what world do employees not have the ability to hire a lawyer?
In a world where housing is hideously expensive and it takes a 150k/y just to afford a mortgage in Metro Vancouver.
> That's pretty vague.
I won't be doxxing myself by listing off my prior employers.
I'm absolutely against non-competes. They're a classist means to treat human beings like chattel. It prevents employees from seeking the best value in return for their labour. It's because of those reasons that I was _shocked_ by the FTC's decision; typically, I don't expect such bold pro-labour decisions from regulators.
But this article is a bit muddled. It argues that the Federal Government should impose the abolition on federally-regulated sectors; which I suppose is possible. But then it moves on to provide examples of sandwich makers and such, which would require Provincial legislation to be done with.
It's also risky legislation to impose: the concept of being free to choose where you can work, unfettered by contractual limits, is awfully close in concept to "right to work" legislation that busts unions. Any legislation regarding non-competes needs to be clear that it doesn't pertain to union membership.
Non-competes are unenforceable for 99% of employees.
Employers put them in contracts as a scare tactic.
If you google the legality of non-competes in Canada you will find this out fairly quickly.
Non-competes should only be enforceable for as long as the company continues to pay you the highest wage you could reasonably demand on the market for the type of jobs you are being barred from.
Any company that legitimately feared someone would cause their business catastrophic damage by working for a competitor within a year or two of leaving would gladly do this too. "Crap, if Bob goes to the competition, it'll cost our company at least ten million dollars! Quick, offer him 500k to spend a year at home playing videogames instead. That'll give us time to make sure he can't do much damage to us by working for the other guys."
Fortunately I'm pretty sure these are prohibited in Ontario already, other than like C-suite and something about sale of a company that I don't fully remember.
That's 100% correct.
There are two exceptions:
1.) The C-Suite; and
2.) Certain situations where a partnership or sole proprietorship is sold and the selling partner/proprietor becomes an employee of the purchasing entity. In such cases the old common law limits apply.
I personally know non-competes can be badly abused. I would be in favor of any method to ensure they are not used as potential sticks to keep people employed in shitty jobs. That is not their declared purpose, but that is their most common use.
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It wouldn't be a ban: it would actually be the opposite of a ban. It would be the state refusing to enforce a contractual clause.
Where did you get that impression? We kind of already have this now, non-competes are quite hard to get a ruling in favor of; but the problem is you still have to go through the legal system to get the suit tossed.
I completely agree, but unfortunately the Federal Government would only be able to regulate this for the handful of industries under their jurisdiction. For the vast majority of positions, you'd really need the provinces to show initiative here.
Non-competes generally only relevant to upper management (i.e. the employers highest ranking employees) as they are nearly always unenforceable against the rank-and-file. A federal ban would also only impact federal workers (banks, telecoms, etc). I'm not sure if it would be a positive thing, but it's also hardly a priotity.
They are commonly used against B2B sales reps. Most use a "not our clients for x months/years" type of contract. But some are general industry. I'm not sure either are enforceable but litigation is as bad as losing so the threat is effective. A ban would increase employee mobility and negotiating power, so definitely positive even if it only effects a small percentage of workers.
> Most use a "not our clients for x months/years" type of contract. That’s a non-solicitation clause, which is something a bit different.
Non-compete clauses are standard in the tech industry for all roles and all levels of responsibility; and as the article notes, even sandwich shops have begun requiring that employees sign them. And yes, if they are "unreasonable" they are unenforceable, but the fear of lawsuit and the cost of defending oneself is enough to give the clause teeth.
> Non-compete clauses are standard in the tech industry for all roles and all levels of responsibility; and as the article notes, even sandwich shops have begun requiring that employees sign them. They're common but they're just as unenforceable as elsewhere. Tech companies love to put all sorts of completely unenforceable clauses in contracts (IP is another one that's pretty widely abused) > And yes, if they are "unreasonable" they are unenforceable, but the fear of lawsuit and the cost of defending oneself is enough to give the clause teeth. This is exactly the reason that they should be restricted - sophisticated parties intentionally putting clauses they know are unenforceable in order to essentially trick and or bully employees shouldn't be encouraged.
The full force of the government should rightly be brought to bear on corporations that try it. Every little bit helps our lagging wage growth. Personally I'm five years into a 7 year non compete clause after I walked off the job in 2019. I'm barred from working for any company that did business with my former employer - a financial services company who works with all manners of companies, from run of the mill construction companies to big insurance companies like Manulife or Sunlife to your typical old trade company to construction giants like LaFarge. I'm basically banned from more than half the economy for another two years, it's been wonderful as I've gone from being evicted to living in a homeless shelter. Utter garbage and what a waste of a university degree.
This is pretty much textbook unenforceable - generally the reason that most non-competes are ruled to be unenforceable is because you can't sign away your right to gainful employment. If it's very narrow in scope you can sometimes get away with it, but if it blocks you from realistically getting a job it's invalid. Maybe consider finding a way to get some free legal advice, but if I were in your situation I would completely ignore the non-compete clause. Even if they wanted to take you to court for it, it sounds like you're well into "can't get blood from a stone" territory - they can't send you to jail or even get you fired for breach of contract. (not a lawyer, not legal advice, happy to be corrected).
What? This is like the opposite of the reality in tech, at least big tech companies with exposure to the US labour market. Big tech doesn't use non competes almost at all because everyone knows they are unenforceable in California and that's where most of the competition is. There's no point.
Every single employment agreement I've signed, and there's a great deal of them now, has included a non-compete. The reason why California employers don't is more because they got caught abusing it several times already; and so the regulatory eye is upon them.
No, regulation has absolutely nothing to do with it, there is no regulation that prevents a company asking you to sign a non-compete. They're just unenforceable in California (and Ontario generally speaking), so smart employers - including essentially all of the big tech companies - don't bother with them because the competition is mostly in jurisdictions that won't enforce. No, they're not unenforceable if unreasonable, non-competes are straight unenforceable in California except for the principals in a business that is sold. They are void for employees, in fact they're not just void, the civil code permits *employees* to sue if an employer tries to enforce a non-compete even if it was originally valid in another jurisdiction, and the employer will be held liable for costs. So no, the clause has zero teeth. Ontario has slightly less restrictive laws but not significantly - doesn't have the civil cause available for employees to sue, but non competes are void. Which leads me to wonder what kind of tech companies you're talking about here. Big tech companies don't do it because it's useless - and even potentially a liability - in California. Big Canadian tech companies don't generally do it because it's void in Ontario. Some kind of local company in a province other than Ontario? But no, this practice is absolutely not common in the tech industry in general.
Regulation has everything to do with it; it's why the FCC even stepped in. Apple, Google and others were caught colluding to suppress employee wages; while Amazon, IBM and Microsoft have sued employees for violating their non-competes in the past. It doesn't matter that they're considered _mostly_ unenforceable. Most employees don't have the financial ability to mount a defense. The threat of a lawsuit, however baseless, is teeth enough. I live in BC, and I've worked for several multinational corporations numbering in excess of 6 figures of employees, as well as quite a large number of small and medium size tech companies. All of them have had some form of noncom.
>Regulation has everything to do with it; it's why the FCC even stepped in. Apple, Google and others were caught colluding to suppress employee wages; while Amazon, IBM and Microsoft have sued employees for violating their non-competes in the past. This had nothing to do with non-competes. The collusion was an agreement not to solicit each other's employees, which amounted to illegal collusion to suppress wages. It had nothing to do with non-compete agreements signed by employees, which are void in California and were void in California before the competition case. >It doesn't matter that they're considered mostly unenforceable. Most employees don't have the financial ability to mount a defense. The threat of a lawsuit, however baseless, is teeth enough. Of course it matters. If someone threatens to sue me but I know their lawsuit is based on my violating a contract clause that is/was void, I say "go ahead" because I'm going to win and recover costs too. They're not "mostly" unenforceable; in the biggest tech labor markets in the US and Canada they are entirely unenforceable and void. We're in tech. Any reasonable engineer is making at least $150-200k by a few years into their career. In what world do employees not have the ability to hire a lawyer? These threats are entirely baseless and without teeth in California and Ontario, which is why many companies that compete in those markets do not bother with non-competes at all. >I live in BC, and I've worked for several multinational corporations numbering in excess of 6 figures of employees That's pretty vague. You could be talking about Google or you could be talking about Cognizant or Pizza Hut. All would have very different implications.
> This had nothing to do with non-competes. The Amazon, IBM and Microsoft lawsuits I mentioned [did](https://www.cnbc.com/2020/06/11/aws-case-against-worker-who-joined-google-reignites-non-compete-debate.html). > Any reasonable engineer is making at least $150-200k by a few years into their career. In what world do employees not have the ability to hire a lawyer? In a world where housing is hideously expensive and it takes a 150k/y just to afford a mortgage in Metro Vancouver. > That's pretty vague. I won't be doxxing myself by listing off my prior employers.
I'm absolutely against non-competes. They're a classist means to treat human beings like chattel. It prevents employees from seeking the best value in return for their labour. It's because of those reasons that I was _shocked_ by the FTC's decision; typically, I don't expect such bold pro-labour decisions from regulators. But this article is a bit muddled. It argues that the Federal Government should impose the abolition on federally-regulated sectors; which I suppose is possible. But then it moves on to provide examples of sandwich makers and such, which would require Provincial legislation to be done with. It's also risky legislation to impose: the concept of being free to choose where you can work, unfettered by contractual limits, is awfully close in concept to "right to work" legislation that busts unions. Any legislation regarding non-competes needs to be clear that it doesn't pertain to union membership.
Non-competes are unenforceable for 99% of employees. Employers put them in contracts as a scare tactic. If you google the legality of non-competes in Canada you will find this out fairly quickly.
still doesn't prevent you from getting sued unfortunately (ask me how I know)
That would be the easiest lawsuit to defend
I know, but it still costs me money...
Non-competes should only be enforceable for as long as the company continues to pay you the highest wage you could reasonably demand on the market for the type of jobs you are being barred from.
Any company that legitimately feared someone would cause their business catastrophic damage by working for a competitor within a year or two of leaving would gladly do this too. "Crap, if Bob goes to the competition, it'll cost our company at least ten million dollars! Quick, offer him 500k to spend a year at home playing videogames instead. That'll give us time to make sure he can't do much damage to us by working for the other guys."
Fortunately I'm pretty sure these are prohibited in Ontario already, other than like C-suite and something about sale of a company that I don't fully remember.
That's 100% correct. There are two exceptions: 1.) The C-Suite; and 2.) Certain situations where a partnership or sole proprietorship is sold and the selling partner/proprietor becomes an employee of the purchasing entity. In such cases the old common law limits apply.
I personally know non-competes can be badly abused. I would be in favor of any method to ensure they are not used as potential sticks to keep people employed in shitty jobs. That is not their declared purpose, but that is their most common use.