Alberta employers regularly include non-compete clauses in employment contracts, but many employees don't realise how difficult these clauses are to enforce in Canadian courts. Alberta courts approach non-competes with scepticism — they're a restraint of trade, and the burden is on the employer to prove the clause is reasonable. That said, a non-compete clause can still create real problems even if it's ultimately unenforceable: a new employer may withdraw a job offer rather than risk litigation, and defending yourself costs time and money.
What is a Non-Compete?
A non-compete clause (also called a restrictive covenant) in an Alberta employment contract prohibits an employee from working for a competitor or starting a competing business for a specified period after leaving the employer, within a defined geographic area. Alberta courts assess enforceability using a reasonableness test: the clause must protect a legitimate business interest (not just prevent competition), be reasonable in scope (duration, geography, and activity restricted), and not be against the public interest. Non-solicitation clauses (prohibiting poaching clients or staff) are a narrower alternative that courts view more favourably.
Red flags to watch for
Alberta courts have consistently struck down non-competes longer than 12 months for most employees. Even 12 months is at the outer limit — shorter periods are more likely enforceable.
A non-compete must be geographically limited to where you actually worked or had customer relationships. A clause covering 'all of Alberta' or 'all of Canada' is almost certainly unreasonable for most roles.
The activity restriction must be tied to the work you actually did. Preventing a software developer from doing any work (including unrelated roles) at a competitor is overbroad.
Under Alberta law, a non-compete introduced after employment begins requires fresh consideration (a raise, promotion, or other new benefit). Continued employment alone may not be sufficient consideration.
Courts prefer the least restrictive means to protect the employer's interests. If a non-solicitation clause would be sufficient, the broader non-compete may be struck down as unreasonable.
Your legal rights
Alberta courts follow the framework from Elsley v. J.G. Collins Insurance Agencies Ltd (SCC, 1978) and Payette v. Guay Inc. (SCC, 2013) for assessing restrictive covenants. The key principles: non-competes are prima facie unenforceable as restraints of trade; the employer bears the burden of proving reasonableness; the clause must protect a legitimate proprietary interest (trade secrets, client relationships, not just general competitive advantage); and ambiguity is resolved against the drafter (the employer). Notable Alberta decisions include Globex Foreign Exchange Corporation v. Fiorica (2023 ABKB) and CanWest MediaWorks v. Fradkin (2007 ABQB), both of which narrowed or struck down overbroad clauses.
Questions to ask before you sign
- 1What specific business interest does this non-compete protect?
- 2What is the duration and geographic scope, and how were they determined?
- 3Would a non-solicitation clause protect your interests instead?
- 4If I'm asked to sign this after starting, what new consideration am I receiving?
- 5What happens if I'm terminated without cause — does the non-compete still apply?
- 6Has this clause been reviewed by Alberta employment counsel for enforceability?
Disclaimer: This guide is for educational purposes only and does not constitute legal advice. Contract law varies by jurisdiction and individual circumstances. Always consult a qualified legal professional before making decisions based on this information.