Can I make key staff sign non-competes after closing?

Buyers sometimes conflate two very different covenants: the non-compete the seller gave as part of selling the business, and a non-compete the buyer wants a key employee to sign afterward. The law treats them very differently, and the second one is far harder to make stick.

Why continuing employment usually is not enough

Courts have generally required real, fresh consideration before an existing employee can be bound to a new restrictive covenant — simply continuing the person’s current job is often not treated as enough on its own. Something the employee did not already have, such as a raise, a promotion, or a signing bonus tied specifically to the covenant, puts the buyer on much firmer ground.

The legislative trend runs against employee non-competes

Several provinces have moved to restrict or prohibit non-compete agreements for employees, typically preserving exceptions for senior executives and for covenants genuinely tied to the sale of a business. A buyer relying on employee non-competes as a retention tool needs to check current provincial rules before drafting anything, not assume the seller’s old template still works.

What tends to hold up better

• Non-solicitation covenants restricting contact with customers or staff, which face less legislative restriction than outright non-competes
• Confidentiality obligations protecting trade secrets and customer information
• Retention arrangements that reward staying rather than restrict leaving

The practical alternative

For genuinely important staff, a properly structured retention arrangement, with real financial incentive tied to staying through a defined transition, tends to achieve what a shaky non-compete cannot, because it does not depend on a court enforcing it after the fact. It also gives the employee a reason to stay engaged during a transition, rather than simply a reason not to leave, which tends to serve the buyer better in the long run.