Why Most Non-Compete Clauses Fail in BC: What Employers Need to Know

Many British Columbia employers include non-compete clauses in their employment agreements, hoping to prevent valuable employees from joining competitors or starting rival businesses.  The reality?  BC courts treat these clauses as presumptively unenforceable unless they meet very strict legal standards.

Understanding when – and how – non-compete clauses work in British Columbia can save your business from costly litigation and help you implement genuinely protective measures.

The BC Legal Landscape: Presumed Unenforceable

Unlike Ontario, which banned non-compete clauses for non-executive employees in 2021, BC has not legislated restrictions.  However, don't mistake this for a green light.  BC courts view non-compete clauses as restraints of trade and treat them as unenforceable by default.

The burden of proof falls entirely on the employer seeking to enforce the clause.  You must demonstrate that the restriction is reasonable – not just convenient for your business.

The IRIS Case: A Cautionary Tale

The BC Court of Appeal's decision in IRIS The Visual Group Western Canada Inc. v. Park (2017 BCCA 301) illustrates common pitfalls.  An optometrist signed a three-year non-compete preventing her from working within five kilometres of an IRIS location.  On paper, the duration and geographic scope seemed reasonable.

The clause failed for two critical reasons:

Ambiguous language: The court questioned what it meant to compete "in conjunction with" another entity or be "concerned with" a competing business.  Vague terms create unenforceability.

Overbreadth: The restriction covered any business dispensing "prescription or non-prescription optical appliances including eyeglasses or sunglasses" – extending far beyond optometry services into retail sunglasses stores where the optometrist posed no competitive threat.

Notably, the Court observed that Dr. Park's original simple clause – "not to practice optometry within 5 kilometres for 3 years" – might have been enforceable.  The lesson?  More words don't mean stronger protection.

Three Tests Your Non-Compete Must Pass

BC courts apply heightened scrutiny to employment-related non-competes.  Your clause must satisfy three requirements:

1. Legitimate Proprietary Interest

Courts recognize protecting trade secrets, confidential information, and trade connections as legitimate interests.  Generic concerns about competition won't suffice.  You must identify specific, protectable business assets the employee could exploit.

2. Reasonable Scope

Geographic scope must be easily identifiable and match where your business actually operates.  A province-wide or Canada-wide restriction that forces employees to relocate will likely fail.

Duration beyond two years in the employment context is typically unenforceable.  The shorter, the better.

Prohibited activities must be limited to your specific field and intersect with work the employee actually performed.  Restricting an employee from roles they never held is excessive.

3. Least Restrictive Measure

Courts favour non-solicitation clauses over non-competes.  A non-competition clause will generally not be enforced if a non-solicitation covenant adequately protects your interest.

What BC Employers Should Do Instead

Rather than relying on questionable non-compete clauses, consider these more enforceable alternatives:

1. Robust Non-Solicitation Clauses

BC courts readily enforce properly drafted non-solicitation clauses.  Limit these to clients and employees with whom the departing employee actually worked.

2. Confidentiality Agreements

Protect proprietary information, customer lists, and business strategies through comprehensive confidentiality provisions.

3. Narrow, Specific Restrictions 

If you must include a non-compete, keep it crystal clear, geographically limited to your actual market, time-limited (ideally under one year), and restricted to the employee's specific role.

The Bottom Line

For regular employment relationships, non-competes rarely survive judicial scrutiny.  For business sales and commercial transactions, they remain powerful and enforceable tools.

A poorly drafted non-compete isn't just unenforceable – it can invalidate other otherwise valid restrictive covenants like non-solicitation or confidentiality clauses.

Before implementing or enforcing restrictive covenants, consult with Alex Robertson.  With deep experience in BC employment law, Alex can help you develop strategic, enforceable protections tailored to your specific business needs – far more effective than boilerplate templates downloaded online.

Alex Robertson: (604) 736-9791 | ar@dwslaw.ca

Disclaimer: This article is not intended to serve as, or should be construed as legal advice, and is only to provide general information. Employment law is fact-specific. Should you require legal advice for your particular situation, please get in touch with us. The information for this article was compiled on January 29, 2026.