Letter Of Non Solicitation Template for Canada

A Letter of Non-Solicitation is a legal document that restricts an individual or business from actively pursuing or soliciting clients, customers, employees, or business partners from another party. Under Canadian law, these agreements are generally more enforceable than non-compete clauses because they protect legitimate business interests without unreasonably restraining trade or employment opportunities.

When do you need this document?

You need a Letter of Non-Solicitation when establishing employment relationships with access to sensitive client information, terminating business partnerships where customer relationships are at stake, or engaging independent contractors who will interact with your client base. This document is particularly valuable when onboarding sales representatives, consultants, or service providers who could potentially leverage your business relationships for competing purposes. Many employers use these letters during employee departures to protect established customer relationships and prevent unfair competition through solicitation of existing clients or key personnel.

Key legal considerations

The enforceability of your Letter of Non-Solicitation depends on meeting strict legal standards established by Canadian courts. The restrictions must be reasonable in scope, duration, and geographic area, protecting only legitimate business interests such as confidential client information or established customer relationships. You must clearly define what constitutes "solicitation" and specify exactly who cannot be contacted or approached. The temporal limitations typically range from six months to two years, while geographic restrictions should align with your actual business territory. Courts will scrutinize whether the restrictions are broader than necessary to protect your legitimate interests, making precise drafting essential for enforceability.

Legal requirements in Canada

Canadian law governing non-solicitation agreements varies between provinces, with Quebec following Civil Code provisions while other provinces apply common law principles established in landmark cases like Elsley v. J.G. Collins Insurance Agencies Ltd. The federal Competition Act prohibits agreements that unduly restrict competition, so your letter must not create unreasonable market restraints. In Quebec, Civil Code articles governing contractual obligations require that restrictive covenants be limited to what is necessary for protecting legitimate interests. Common law provinces follow the three-part test requiring protection of proprietary interests, reasonable scope and duration, and consideration of public interest. Your agreement must include adequate consideration, whether through employment, payment, or other valuable benefits, and should specify the governing provincial law to ensure clarity in enforcement proceedings.