What If My Contractor Steals All My Clients?

Let’s say a contractor who you trusted steals all your clients. As painful, frustrating, and downright heart-breaking this experience may be, it does and can happen. However, there is some power in knowing it can happen and perhaps, even expecting it too. This expectation can help you put plans in place that will minimize this loss. This is where a non-solicitation clause will come into play. This clause allows you to set clear boundaries to establish how a contractor will act when they are completing a job for you. You hired them to represent you, and therefore you have the power to control what is allowed. It can also be helpful to include a non-compete clause in your Independent Contractor Agreement. This will support the non-solicitation provision by limiting the contractor’s ability to provide services or engage in any aspects of business that are similar in nature to what the previous company was doing.

How Long is Too Long for a Non-Solicitation Clause to be in Place?

When drafting a solicitation clause, it is important to take note of important characteristics that will determine its success in protecting you and your business. If a dispute were ever to reach the Courts over the enforceability of a non-solicitation clause, the law heavily favours employees for matters of contract interpretation. This is because of the power imbalance that is usually inherent in the relationship between employer and employee. The Courts will be on the employer’s side to enforce the non-solicitation clause as long as it is reasonable and within the interests of the public.

In deciding what is reasonable, the Courts focus on how long the non-solicitation clause lasts for, the geographic scope it covers, whether it is vague or clear and whether it promotes the public interest. A clause that is, for example, set for 10 years to prevent a contractor of only two years from being in business with any related clients, could potentially be deemed to be unreasonable. Geographic scope is also important, as a clause that covers all of Canada would not be reasonable. In fact, a recent case in Ontario found that a non-compete clause preventing a previous employee from working within a 750-mile radius of any of their former employer’s competitors to be overly broad (Stress-Crete Limited and King Luminaire Company Inc. v. Harriman, 2019 ONSC 2773 (Ont. Sup. Ct.)). The non-solicitation clause must also be specific. Anything restricted that is ambiguous will be deemed to be too broad in scope and has the potential to not be enforceable.