A non-compete clause is one of the most restrictive provisions that can appear in an employment contract. It attempts to prevent employees from working for competitors or starting a competing business after leaving their job.
In Alberta, non-compete clauses are not automatically illegal. However, courts are often reluctant to enforce them unless the restriction is clearly justified and carefully drafted.
If a non-compete clause goes further than necessary to protect an employer’s business interests, it may be unenforceable.
What Is a Non-Compete Clause?
A non-compete clause in Alberta is a contractual restriction that attempts to prevent a former employee from competing with their employer after leaving the company.
These clauses may attempt to restrict a former employee from:
- Work for a competing company
- Start a competing business
- Providing similar services to former clients
- Operating within a defined geographic area
Because these restrictions can significantly limit a person’s ability to earn a living, Alberta courts examine non-compete clauses carefully.
Are Non-Compete Clauses Legal in Alberta?
Sometimes — but only if they are reasonable and clearly drafted.
Alberta courts will closely examine whether a non-compete clause is:
- Limited in time
- Limited in geographic scope
- Necessary to protect legitimate business interests
- Clear and unambiguous
If a clause is overly broad, vague, or restricts more activity than necessary, a court may refuse to enforce it.
Why Courts Often Reject Non-Compete Clauses
Courts across Canada — including in Alberta — generally prefer restrictions that limit specific conduct rather than employment itself.
For example, employers may be able to protect their interests through:
- Non-solicitation clauses
- Confidentiality agreements
- Protection of trade secrets
How Long Can a Non-Compete Clause Last in Alberta?
The length of a restriction is one of the most important factors courts consider.
Common durations in employment contracts include:
- 6 months
- 12 months
- 24 months
However, longer restrictions may be considered unreasonable depending on the employee’s role and the industry involved.
Non-Compete vs Non-Solicitation Clauses in Alberta
Non-compete clauses and non-solicitation clauses are often confused, but they serve different purposes.
Non-Compete Clauses
Restrict a former employee from:
- Working for a competing company
- Starting a competing business
- Operating within a certain geographic area
Non-Solicitation Clause
Restrict a former employee from:
- Contacting former clients or customers
- Recruiting coworkers
- Redirecting business opportunities
Learn more about these restrictions in our guide to non-solicitation clauses in Canada.
What If Your Employer Tries to Enforce a Non-Compete Clause?
If an employer claims a non-compete clause prevents you from accepting a new job, do not assume the restriction is enforceable.
In many situations:
- The clause may be too broad
- The restriction may not be necessary to protect legitimate interests
- The clause may be unclear or poorly drafted
Speak With an Employment Lawyer
Non-compete clauses can create uncertainty when employees change jobs or accept new opportunities.
The Alberta employment lawyers at Samfiru Tumarkin LLP have helped tens of thousands of employees across Canada understand their workplace rights.