Jeanne Pratt says non-compete agreements can block job changes or starting businesses and are unusually prevalent in Canada.
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Jeanne Pratt, interim commissioner of competition, has urged provincial and territorial ministers to limit how often non-compete agreements are used for employees.
In an open letter dated Thursday, Pratt said non-compete agreements can prevent workers from changing jobs or starting a competing business in their area of expertise. She said these restraints can be justified only in limited circumstances, but that evidence shows they are unusually prevalent in Canada.
Non-compete agreements can restrict workers from joining a rival company or starting a competing business for a set period after leaving a job, Pratt said.
Pratt argued that worker mobility helps people find jobs that better match their skills and negotiate improved pay and working conditions, and also helps businesses recruit staff. She said, "To succeed in a changing economy, Canada needs workers and businesses that can adapt and grow," adding, "I encourage governments to remove unnecessary barriers to labour mobility, so that workers can find better jobs, businesses can expand and innovation can thrive."
Pratt noted that Ontario already prohibits most non-compete agreements, subject to certain exceptions, and said the federal government has proposed similar limits in federally regulated businesses.
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