The federal government’s plan to prohibit non-compete agreements in federally regulated workplaces, including insurers, may not cause an immediate shakeup in employee mobility – but it could change how employers handle contracts from the outset, according to Richelle Pollard (pictured right), partner in employment and labour law at KPMG Law LLP.
Pollard said the move mirrors steps already taken at the provincial level. Ontario banned most non-compete clauses in 2021 under the Working for Workers Act, which she described as part of a broader push toward greater employee protection, transparency, and mobility.
She said the federal proposal follows the same logic – but because federally regulated employers tend to be larger and more complex, the operational impact could be broader. “Given that this impacts federally regulated employers, who tend to be very large in size – financial and banking – there are various levels that are going to be impacted by this,” Pollard said.
Courts, she noted, have already been skeptical of non-competes. “Enforcing non-competes up until now has been very difficult,” she said. “Our courts are not really in the business of limiting employee mobility, they don't want to be restricting people's livelihoods.”
That reluctance means the legislative ban may not revolutionize job movement overnight, but it will prompt insurers and brokerages to reassess employment contracts and recruitment strategies. Pollard expects more attention on how contracts are structured “at the front end of the relationship” – the onboarding phase – and on which protections remain viable in place of a non-compete.
“It’ll be a tool that could empower employees to feel that they can move more freely without worry,” she said.
The psychological effect, she added, could be significant. “You may see more natural movement in the market,” Pollard said, though she noted non-competes have already been difficult to enforce for most workers except senior executives or highly specialized employees.
From a business perspective, Chris Cornell (pictured left), partner and national sector leader for insurance at KPMG Canada, said the changes could have greater consequences in functions where the talent market is already stretched.
“There are certain key areas within insurance where there are talent shortages,” he said. “There, we might see more impact or potential movement.”
Cornell pointed to underwriting, actuarial work, and brokerage channels as examples — roles that are both revenue-generating and under pressure from technological disruption. “Those areas are also being disrupted by technology as well,” he said. “So I think you have to look at this as a complete package across the industry, in terms of what are all different factors that are impacting those roles.”
Despite those pressures, Cornell does not expect a sharp increase in turnover tied directly to the ban. “I wouldn’t anticipate that,” he said. “I think it’s another thing in the toolbox that employees have in order to be able to think about their career holistically.”
He added that much of the industry, particularly in Ontario, has already been operating under similar restrictions since 2021.
Pollard agreed that employers will need to rethink their retention strategies now that non-competes can no longer serve as a deterrent to employee movement. Without that contractual safeguard, she said, companies may have to place greater emphasis on compensation, engagement, and other incentives to retain key talent rather than relying on restrictive clauses.
Pollard advised employers to begin reviewing their existing contracts to identify any non-compete clauses and prepare for adjustments ahead of the legislative change. She noted that many federally regulated organizations are large and complex, meaning the process of updating agreements could involve several layers of coordination. Employers, she said, should take stock of where non-competes currently exist and determine which other contractual tools can still be used once those provisions are removed.
While non-competes may soon be off the table, Pollard emphasized that other mechanisms remain available. Employers can continue to use confidentiality and non-solicitation clauses, which will remain key for protecting client relationships, proprietary information, and employee retention. This distinction is particularly important in the insurance sector, where advisers and brokers frequently change firms and client books often move with them.
Drawing on Ontario’s earlier experience, Pollard observed that some employers initially misunderstood the scope of that province’s 2021 ban and assumed it extended to non-solicitation clauses. “That was not the case,” she said.
