When Can a Business Enforce an Independent Contractor’s Non-Compete?

An Alberta court decision offers guidance on jurisdiction, contractor status and the evidence needed to obtain an injunction.

In FYi Eye Care Services and Products Inc v Steller, 2026 ABKB 757, released October 29, 2026, BD&P's Trevor McDonald, Hema Ahuja and Gurjot Sekhon successfully obtained an injunction on behalf of FYi Eye Care Services and Products Inc. (FYi), preventing an optometrist from practising within five kilometres of his former FYi clinic for 12 months after the termination of their association.
The decision addresses Alberta’s jurisdiction over a dispute in Ontario, the optometrist’s status as an independent contractor, and the enforcement of the non-competition covenant.

At a glance

• An Alberta court enforced a five-kilometre, 12-month non-compete.
• The optometrist was treated as an independent contractor.
• The business had to meet the higher “strong prima facie case” standard.
• Evidence of patient movement, lost referrals and other work options supported the injunction

Background

FYi operates optometry clinics across Canada. Dr. Matthew Steller practised at FYi clinics in Mississauga, Ontario, under an Administrative Services and Licence Agreement (Agreement). FYi provided facilities, equipment and staff, and controlled retail sales. Dr. Steller provided optometric and medical services to his patients and paid FYi a percentage of his patient billings.

The Agreement prohibited Dr. Steller from practising optometry within five kilometres of the practice location for 12 months after termination. After FYi terminated the Agreement, he began practising at a competing clinic approximately 600 metres from FYi’s Kingsbridge clinic. He also practised half-time in Brampton, outside the restricted area. FYi applied for an injunction enforcing the non-compete covenant.

1. Alberta Court had jurisdiction over Ontario dispute

The Agreement selected Alberta law and required arbitration under Alberta’s Arbitration Act. It also gave Alberta courts exclusive jurisdiction over applications for injunctive and certain other non-monetary relief.

Dr. Steller challenged Alberta’s jurisdiction while responding to the merits of the injunction application on what he described as a “contingent” basis. The Court held that this participation constituted attornment, or submission to the Court’s jurisdiction, despite his express reservation. Although Justice Feasby questioned the efficiency of the existing rule, he concluded that it remained the law in Alberta. 

The Court also upheld the forum selection clause. Its language was clear, both parties were sophisticated, and there was no credible evidence of duress or a power imbalance that would prevent enforcement. It further rejected Ontario as a more appropriate forum, noting that the injunction application had already been litigated in Alberta and that the underlying damages dispute was reserved for arbitration.

2. The relationship was not traditional employment

Applying the independent contractor framework in 671122 Ontario Ltd v Sagaz Industries Canada Inc, 2001 SCC 59, the Court found that the clinic services arrangement did not resemble a customary employment relationship. Dr. Steller provided professional services to patients and paid FYi a percentage of his billings in exchange for the clinic infrastructure and support. The Agreement and his own communications described him as an independent contractor, although the Court placed limited weight on those labels. Ontario’s regulatory restrictions on optometrists’ employment further reinforced that conclusion.

3. The non-compete was reasonable and enforceable

An applicant seeking an interlocutory injunction ordinarily must establish a serious issue to be tried, irreparable harm, and a balance of convenience favouring relief. FYi argued that the serious issue threshold applied because Dr. Steller was an independent contractor.

The Court required a strong prima facie case instead, citing that FYi had not purchased Dr. Steller’s business or goodwill, distinguishing the arrangement from a sale of business. The covenant also restricted his ability to practice his profession, raising the same restraint of trade concerns as a quasi-employment relationship.

FYi met the higher threshold. The covenant was clear, and its five-kilometer radius and 12-month duration were reasonable. FYi had a legitimate interest in protecting both its share of patient billings and retail sales to those patients. The surrounding market offered substantial opportunities for Dr. Steller to practice elsewhere. The Court also considered the duration reasonable in light of authority addressing optometrist recruitment and the interval between patient appointments.

FYi established irreparable harm. At least 25 patients had followed Dr. Steller to his new clinic. Although departing patients could be counted, lost referrals and their effect on future revenue could not be quantified. 

The balance of convenience also favoured FYi. Dr. Steller’s practice outside the restricted area demonstrated that alternative work was available, and there was no evidence that the restriction would impair public access to eye care. The Court granted the injunction for 12 months commencing on the termination date. 

Takeaways

What businesses should know:

• Forum clauses matter. Courts may hold parties to an agreed jurisdiction, even when the business and alleged breach are in another province.
• Contractor labels are not enough. Courts will examine how the relationship works in practice.
• Non-competes require careful drafting. The duration and geographic area must be no broader than needed.
• Evidence is critical. Customer movement, lost referrals and the contractor’s ability to work elsewhere may influence whether an injunction is granted.

Parties that agree to have disputes heard in Alberta may be held to that choice even where the business operates, and the alleged breach occurs, in another province. A party seeking to challenge jurisdiction should obtain an agreement preserving that objection before responding to the merits. An express statement that participation is contingent may not prevent the party from submitting to Alberta’s jurisdiction.

Whether a professional is an employee or an independent contractor depends on the substance of the arrangement, rather than the contractual label alone. The services each party provides, the payment structure and the applicable professional regulatory framework may support independent contractor status. 

Businesses seeking to restrain competition by an independent contractor may still be required to establish a strong prima facie case where the restriction affects the contractor’s ability to earn a livelihood. The covenant must be clear, and its geographic scope and duration must reasonably protect the business’s legitimate interests. Evidence that customers have followed the contractor, that future referrals cannot be quantified, and that the contractor can continue working outside the restricted area may support an injunction.

Businesses using non-competition clauses should review whether the restriction is tailored to the interests they need to protect and whether they could produce the evidence required to enforce it.