Non-Competes, IP and Privacy: Canada vs Italy

Ontario has largely banned non-competes for employees, while most other provinces leave them to common-law reasonableness. Italy takes a third route: a non-compete is valid only if it is in writing, limited, and paid for. Privacy rules for employees are also stricter in Italy, under the GDPR and the Workers’ Statute. Full comparison on Italy vs Canada .

Non-competes  

Ontario: since 25 October 2021, the ESA prohibits employers from entering into non-compete agreements with employees. Exceptions: executives (CEO, president and other “chief” officers) and the sale of a business where the seller becomes an employee of the buyer. Non-solicitation and confidentiality clauses remain possible.

Other provinces: courts apply the common-law restraint of trade doctrine: a non-compete is enforceable only if it protects a legitimate interest and is reasonable in scope, time and geography, and courts often prefer non-solicitation clauses. Quebec’s Civil Code requires non-competes to be in writing and limited.

Italy (art. 2125 Civil Code): a post-employment non-compete is valid only if:

• it is in writing;
• it is limited in object (the activities restricted), place and time: at most 5 years for dirigenti and 3 years for other employees;
• the employee receives specific consideration, appropriate to the restriction.

A clause without payment, or with a token payment, is void. The consideration is usually a percentage of salary paid during employment or a lump sum at exit, and it is subject to tax and contributions. Courts also strike down clauses so broad that they prevent the employee from working in their field.

Loyalty and confidentiality during employment  

Italian employees owe a statutory duty of loyalty (art. 2105 Civil Code): they may not compete with the employer or disclose or misuse confidential information during employment. This applies without a clause. Confidentiality after employment should be covered contractually and by trade secret law.

Intellectual property  

In Canada, ownership of employee inventions and copyright generally depends on the employment relationship and contract, so IP assignment clauses are standard. In Italy, inventions made in performing the job as part of the duties belong to the employer; copyright in software and databases created by employees in the course of their duties also belongs to the employer. Other inventions may give the employee a right to fair compensation. A clear IP clause in the Italian contract is still recommended.

Privacy and monitoring  

Canada: private-sector employee privacy is governed by federal law (PIPEDA, for federally regulated employers) or provincial statutes in some provinces (Quebec, BC, Alberta). Ontario private-sector employers outside federal regulation have fewer statutory employee privacy rules, though larger Ontario employers must have an electronic monitoring policy.

Italy: the GDPR applies to all employee data, with the Italian Data Protection Authority (Garante) active on workplace cases. In addition, art. 4 of the Workers’ Statute (Law 300/1970) restricts remote monitoring:

• Tools from which remote control of employees is possible (cameras, some software) may be installed only for organisational, production, safety or asset-protection reasons, and only with a union agreement or authorisation from the labour inspectorate.
• Work tools (laptops, phones) do not need that authorisation, but data from them can be used only if employees received adequate information on how tools are used and checked, in line with the GDPR.

Continuous tracking, keystroke logging or reading personal email is very likely unlawful in Italy.

Side by side  

Data transfers  

Personal data sent from Italy to Canada is a transfer outside the EU. Canada benefits from an EU adequacy decision for organisations covered by PIPEDA, which simplifies transfers.

Common questions from Canadian employers  

Can we use our Canadian non-solicitation clause? Non-solicitation of clients is often treated by Italian courts as a form of non-compete, so it should meet the art. 2125 conditions, including payment. Non-solicitation of employees is treated more leniently.

Can we pay the non-compete only if we choose to enforce it? Clauses that let the employer decide unilaterally at exit whether to activate the non-compete are often held void. Agree it at hiring.

Can we install monitoring software on the laptop? Only within art. 4 limits and with a clear GDPR notice; productivity tracking that monitors the employee continuously usually needs union agreement or authorisation and may still be unlawful.

Who owns code written at home on weekends? If it falls within the employee’s duties and uses company resources, generally the employer; otherwise ownership may stay with the employee. A clear IP clause and invention disclosure process help.

What this means if you hire through an EOR  

The EOR’s Italian contract includes confidentiality and IP clauses and, where you need one, an art. 2125 non-compete with proper consideration. It issues the GDPR privacy notice and the tool-use policy required to use work-tool data. You should define what you need to protect before the hire, and budget for any non-compete payment. See Italian employment contracts , the cost calculator , other countries or contact us .

Related guides for companies in Canada  

• Reasonable notice in Canada vs dismissal rules in Italy
• Employment standards in Canada vs the Italian contract and CCNL
• ESA severance pay and the ROE vs TFR in Italy

General information, not legal advice.