Non-Compete Clauses in Alberta: Are They Enforceable?

When starting a new job in Alberta, many employees are asked to sign contracts that include non-compete clauses. These provisions aim to prevent workers from joining a competitor or starting a similar business after leaving their employer.

However, non-compete clauses are often misunderstood — and in many cases, they are not legally enforceable. This guide from the Employment Law team at Libra Law explains when non-competes may be valid, how Alberta courts interpret them, and what employees should know before signing or challenging one.

What Is a Non-Compete Clause?

A non-compete clause (also known as a restrictive covenant) is a contractual term that restricts an employee from working for a competitor or starting a similar business for a certain period of time after employment ends.

Employers use non-competes to protect trade secrets, confidential information, and client relationships. These clauses typically include:

• A time limit (for example, six months or one year)
  
• A geographic area where the restriction applies
  
• A description of the type of work or industry covered
  

While the intention may be to protect legitimate business interests, these clauses can unfairly limit an employee’s ability to earn a living — which is why courts scrutinize them carefully.

Are Non-Compete Clauses Enforceable in Alberta?

In Alberta, non-compete clauses are presumed unenforceable unless the employer can prove they are reasonable and necessary to protect legitimate business interests. Courts take a strict approach, often striking down clauses that are too broad, vague, or restrictive.

To be enforceable, a non-compete must:

1. Protect a legitimate interest such as trade secrets or client lists.
   
2. Be reasonable in scope, including duration, geography, and type of work.
   
3. Not prevent the employee from earning a livelihood.
   

If any of these elements are unreasonable, the entire clause is likely invalid. For example, a one-year restriction covering all of Alberta’s industries would almost certainly be struck down.

In most cases, employers should rely on non-solicitation clauses (which prevent employees from contacting former clients or co-workers) rather than broad non-compete restrictions.

The Legal Trend: Courts Favor Employees

Recent Alberta and Canadian case law shows a clear trend toward limiting non-compete enforcement. Courts recognize that these clauses can unfairly restrict mobility and competition in the job market.

Judges typically ask:

• Is the restriction necessary to protect the employer’s confidential information or goodwill?
  
• Could a narrower clause (such as non-solicitation) achieve the same goal?
  
• Was the clause clearly explained to the employee before signing?
  

If the answer to any of these questions is no, the clause is unlikely to be enforced.

If you’ve been presented with a restrictive covenant, a workplace rights lawyer in Alberta can review the contract and advise whether it’s enforceable.

What Employees Should Do Before Signing

If your employment contract includes a non-compete clause:

• Read it carefully. Pay attention to how long the restriction lasts and where it applies.
  
• Ask questions. Clarify what activities are prohibited and whether it applies to future roles in your industry.
  
• Seek legal advice. A Calgary employment lawyer can help you understand the implications before you sign.
  

Once you sign a contract, challenging a clause can be more complicated — so it’s best to review it before agreeing to the terms.

What If You’ve Already Signed One?

If you have already signed a contract with a non-compete clause, you still have options. Courts often refuse to enforce restrictions that are overly broad or unfair, even if both parties agreed to them in writing.

An experienced employment lawyer can:

• Review whether the clause meets Alberta’s legal test for reasonableness
  
• Advise you on potential risks of joining a competitor
  
• Help you negotiate release or modification of the clause
  

If your former employer threatens legal action, having professional legal representation early can help resolve disputes quickly and protect your career.

Final Thoughts

In Alberta, most non-compete clauses are not enforceable unless they are narrowly written and justified by legitimate business needs. Employers must balance their right to protect confidential information with an employee’s right to work freely.

If you’ve been asked to sign a restrictive covenant or are facing enforcement of a non-compete, speak with an employment lawyer at Libra Law. Our team can review your contract, explain your rights, and help you move forward with confidence.

Disclaimer: This article is for general informational purposes only and does not constitute legal advice. To obtain advice specific to your situation, please consult a lawyer or qualified professional.