Are Non-Compete Clauses Still Worth It? What BC Employers Should Know in 2026

For years, BC employers reached for the non-compete clause as their default tool to protect the business when a key employee leaves. That era is over. Between recent BC court decisions and a proposed federal ban, non-competition clauses have fallen out of favour, and employers who still rely on them may be holding an unenforceable promise. The better protection for most businesses is usually a narrower tool, a non-solicitation and/or confidentiality clause, as explained below.

The Proposed Federal Non-Compete Ban: What’s Happening in Ottawa

The shift isn’t just happening in the courts.  On May 6, 2026, the federal government introduced Bill C-31 (the Budget 2025 Implementation Act, No. 2), which would amend the Canada Labour Code to ban most non-compete clauses in employment contracts for federally regulated industries.  The stated goals are letting Canadians change jobs more easily, reducing worker exploitation, and improving competition in the job market.  

Importantly, this proposed ban would apply to federally regulated employers (such as banks, airlines, and telecommunications and interprovincial transport companies).  Most BC businesses are provincially regulated, so they wouldn’t be directly caught by the federal ban, but the direction of travel is unmistakable, and BC courts have been moving the same way for years.

BC Courts: Non-Competes Are Presumptively Unenforceable

In the employment context, BC courts treat non-competition clauses as restraints of trade that are presumed unreasonable unless the employer proves otherwise.  The reasoning is practical: unlike the sale of a business, where a seller is paid for goodwill, an employee usually receives no such payment and typically has less bargaining power than the employer (Dentalcorp Health Services Ltd. v. Dr. J.S. Minhas Dental Corp., 2024).  As a result, a non-compete will rarely be found reasonable in a pure employment relationship.

Recent decisions show how easily these clauses fail:

• Dibble v. Creative Music Therapy Solutions Inc. (2024): The BC Supreme Court struck down a covenant that was both ambiguous and excessive in scope – geographically unlimited with a three-year term that wasn't necessary to protect the business.

• IRIS The Visual Group Western Canada Inc. v. Park (2017): The BC Court of Appeal upheld a finding that a non-compete against a departing optometrist was unenforceable.  Even though the time and geographic limits were reasonable, the clause covered far too broad a range of prohibited activities and was ambiguous.  An ambiguous restrictive covenant is prima facie unenforceable, because the employer can't prove it's reasonable when no one can say what it means.

• Powell River Industrial Sheet Metal Contracting Inc. v. Kramchynski (2016): A non-compete that was reasonable when signed became unenforceable after the employer failed to provide the promised work, tipping the clause from legitimate protection into an exploitive restraint.

The Better Tool: Non-Solicitation Clauses 

Here’s the practical takeaway.  Courts distinguish between keeping a former employee out of the business entirely (a non-compete) and simply stopping them from soliciting your customers (a non-solicit).  Because non-solicitation clauses are less anti-competitive, they are far more likely to be enforced, and courts will generally refuse to enforce a non-compete where a non-solicitation clause would adequately protect the employer.

That said, non-solicits aren’t bulletproof.  In Quick Pass Master Tutorial School Ltd. v. Zhao (2022), the BC court struck down a non-solicitation clause as overly broad because it effectively barred soliciting anyone, even people the employee had never dealt with and couldn’t identify as customers.  Precise drafting still matters.  Confidentiality and non-disclosure clauses attract the least scrutiny and are the most durable of the three.

Review Your Employment Agreements Now

If your standard contracts still lean on non-compete clauses, they may not protect you when it counts.  A short review now can spare you the surprise of an unenforceable clause when it matters most.  Contact Alex Robertson at (604) 736-9791 or ar@dwslaw.ca to review your restrictive covenants and update them to reflect current BC and federal law.

Disclaimer: This article is not intended to serve as, or should be construed as legal advice, and is only to provide general information. For advice about your specific situation, please contact us. The information for this article was compiled on July 6, 2026.