Non-compete clause
A non-compete clause is a contract term that restricts a person from competing with a business, for a set time and area, after the relationship ends. It appears in employment contracts, shareholders agreements and agreements for the sale of a business.
How BC law treats it
Restrictive covenants are presumed to be unenforceable restraints of trade unless the party relying on them proves they are clear and reasonable, and courts will not rewrite an overbroad clause (Shafron v KRG Insurance Brokers (Western) Inc, 2009 SCC 6). Covenants given on the sale of a business are reviewed more leniently (Payette v Guay inc, 2013 SCC 45).
What it means for your business
In employment, a narrower non-solicitation clause is often more enforceable than a broad non-compete.
Risks and common mistakes
An overbroad or ambiguous non-compete is likely to be struck down entirely, leaving no protection at all.
For the full explanation, see our entry on Non-competition agreement.
General information about British Columbia and Canadian law, current to October 2026. It is not legal advice.
