As the business landscape in Alberta becomes increasingly competitive, protecting your company’s intellectual property, client base, and workforce is more important than ever. One common method employers use to safeguard their interests is through non-compete clauses in employment contracts. But how enforceable are these clauses in Alberta? And how can you ensure yours is legally sound?
What Is a Non-Compete Clause?
A non-compete clause is a contractual term that restricts an employee from working for a competitor or starting a competing business for a certain period after leaving your company. The goal is to prevent them from using confidential knowledge or relationships gained during their employment to benefit a competitor.
Are Non-Compete Clauses Enforceable in Alberta?
Canadian courts—including those in Alberta—are generally skeptical of non-compete clauses. The law considers them a restraint on trade and only enforces them when they are deemed reasonable in scope, geography, and duration. Courts prefer less restrictive options, like non-solicitation clauses, unless a non-compete is clearly necessary to protect legitimate business interests.
What Makes a Non-Compete Clause Reasonable?
To stand a chance in court, a non-compete clause must be:
- Clearly worded
- Narrow in scope — It should only restrict activity that genuinely threatens your business.
- Geographically limited — The restricted area should relate to where your company actually operates.
- Limited in time — Typically, anything over 12 months is hard to justify unless very specific circumstances exist.
Best Practices for Employers in 2025
- Use non-competes sparingly — Consider if a non-solicit or confidentiality clause is sufficient.
- Customize clauses — Avoid copy-paste contracts. Tailor each agreement to the employee’s role and risk.
- Review existing contracts — Have your legal counsel assess old contracts to ensure they comply with current standards.
- Be transparent — Ensure employees understand what they’re signing and why.
A well-drafted non-compete clause can be an effective tool to protect your business, but only if it’s done right. Trying to overreach can lead to the entire clause—and sometimes the whole agreement—being thrown out. Consult with a legal professional to make sure your contracts reflect the latest legal expectations.
Disclaimer: This article is provided for general information purposes only and does not constitute legal advice. Laws may change over time and vary by jurisdiction. For advice specific to your situation, please consult a qualified lawyer.
Pritchard and Co. Law Firm, LLP helps you navigate the turning points of life.
Contact us at 403-527-4411 or at lawyers@pritchardandco.com.
