There is a lot argument going on right now especially in the US State of Massachusetts as to the legitimacy of non compete agreements. Non compete employment agreements are currently allowed in most EU countries, all Canadian provinces, and 49 of 50 US States. The 50th US State that prohibits non competes happens to be California, the largest US State.
Canadian courts will enforce non-competition and non-solicitation agreements, however, the agreement must be limited in time frame, business scope, and geographic scope to what is reasonably required to protect the company’s proprietary rights, such as confidential marketing information or client relations and the scope of the agreement must be unambiguously defined. The 2009 Supreme Court of Canada case Shafron v. KRG Insurance Brokers (Western) Inc. held a non-compete agreement to be invalid due to the term “Metropolitan City of Vancouver” not being legally defined.
The 2000 Ontario Court of Appeals case Lyons v. Multary established a general preference towards non-solicitation over non-competition agreements, regarding the latter as “much more drastic weapons” and held a non-competition agreement to be invalid when a non-solicitation agreement would have been sufficient to protect the company’s interests.