On November 30, the Ontario government passed the Working for Workers Act, 2021 (the Act), which includes, among other things, prohibitions on the use of non-compete obligations in employment agreements and requirements for most employers in Ontario to develop “disconnecting from work” policies.
The Act prohibits employers from entering into non-compete agreements with most employees. The prohibition is effective as of October 25, 2021. Subject to the exceptions discussed below, any non-compete agreements entered into since that date are voided by the legislation.
A “non-compete agreement” is defined in the Act to include “an agreement, or any part of an agreement, between an employer and an employee that prohibits the employee from engaging in any business, work, occupation, profession, project or other activity that is in competition with the employer’s business after the employment relationship between the employee and the employer ends”.
There are two exceptions to the prohibition on non-compete agreements:
Although the prohibition on the use of non-compete provisions places limitations on an employer’s ability to protect its business interests, importantly, the Act does not prevent employers from entering into non-solicitation or confidentiality agreements. Accordingly, employers still have tools at their disposal with which to attempt to prevent disruptions to their business following the departure of employees. Employers should carefully review their existing non-solicitation and confidentiality agreements to ensure they are sufficiently protected.
There are a number of issues that remain unclear and are not specifically addressed by the Act:
The Act requires all employers who employ 25 or more employees as of January 1 of any year to have a written policy in place by March of that year for all employees with respect to disconnecting from work. “Disconnecting from work” is defined as “engaging in work-related communications, including emails, telephone calls, video calls or the sending or reviewing of other messages, so as to be free from the performance of work”.
The Act does not include any specific requirements for a disconnecting from work policy. For example, there is nothing in the legislation that prohibits employees from working (or being asked to work) outside of their “usual” business hours. Further, there are no exceptions made for executive or other higher-ranking employees (who are often expected to work, or at least check their e-mail, off hours). We would anticipate, however, that the Ontario government will promulgate a Regulation to prescribe the contents of a disconnecting from work policy pursuant to the Act.
The Act prohibits persons from operating as a temporary help agency or acting as a recruiter without a license and prohibits knowingly engaging or using the services of an unlicensed temporary help agency or recruiter. The Act sets out specific license application requirements for recruiters and record-keeping requirements for recruiters and clients of temporary help agencies.
The Act further prohibits recruiters from intimidating or penalizing a prospective employee who asks the recruiter to comply with the Employment Standards Act, 2000, gives information to an employment standards officer, testifies or participates in a proceeding under the Employment Standards Act, 2000, or makes inquiries regarding the license of a recruiter or temporary help agency.
To discuss these issues, please contact the author(s).
This publication is a general discussion of certain legal and related developments and should not be relied upon as legal advice. If you require legal advice, we would be pleased to discuss the issues in this publication with you, in the context of your particular circumstances.
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