A 'forever' commission clause got tossed, but a tighter no-solicit deal held up
A real estate team tried to claim commissions on former clients forever. A Manitoba court shut that down, though it let a tighter one-year non-solicitation clause stand.
In an August 27, 2026, decision, Justice Chartier of the Manitoba Court of King's Bench ruled on a dispute between a Winnipeg real estate team and one of its former agents, who had left to work with another realtor. The court struck down a clause giving the team a cut of the agent's future deals with no end date but upheld a one-year clause barring him from soliciting the team's clients and contractors.
A claim on deals with no end date
The agent joined the team as an independent contractor in November 2017. The agreement he signed included a commission clause covering what it called secondary transactions, deals flowing from clients or prospects he dealt with while on the team. Those transactions were said to remain the team's property in perpetuity, and the agent had to split commissions if a former or prospective client came back to him after he left.
Justice Chartier found the clause ambiguous. Terms such as secondary transaction and prospective client were never defined and are not standard in the real estate industry, the court noted. A related subclause extended the obligation to any former or prospective client who contacted the agent after he left, without tying that group to deals he had worked on, broadening its reach well beyond what the team had argued.
Even if the wording had been clear, Justice Chartier found the clause unreasonable as a restraint on trade. It carried no geographic limit and no cutoff date, and it claimed a proprietary interest in transactions themselves rather than in client relationships, which the real estate industry's own practice of fixed-term service agreements did not support. “The duration of the commission clause is for an unreasonable length of time, in perpetuity,” the court found, ruling it invalid and unenforceable.
A narrower no-solicit rule survives
The agreement also included a one-year non-solicitation and non-competition clause, limited to Winnipeg and several neighbouring municipalities. It barred the agent from soliciting the team's clients, contractors or employees, or from doing anything likely to hurt the team's business or its relationships with customers and staff, for a year after he left.
Unlike the commission clause, Justice Chartier found this clause was not ambiguous and had clear limits, a one-year term and a defined geographic area. The team's client base from that period could be identified by checking the multiple listing service history for the properties involved, making the clause workable in practice. The court also confirmed that independent contractors are treated the same as employees when assessing whether a restrictive covenant is reasonable.
“I find that the non-solicitation clause is reasonable and enforceable,” the court ruled, finding the team has a legitimate interest in protecting its client base and that the restriction did not stop the agent from competing generally, only from targeting the team's existing relationships.
Corporate shields and an open question on costs
The court also addressed the corporate structures both sides used. The agent now works through his own real estate corporation, and since March 2024 has partnered with another agent who operates through a similar corporate structure. Justice Chartier found none of those corporations were parties to the 2017 agreement, so none are bound by its terms.
The result split the difference between the two summary judgment motions. The team's bid to enforce the commission clause failed, while the defendants' bid to strike both restrictive clauses succeeded only in part, since the non-solicitation clause was upheld.
Costs were left open, to be addressed separately if the parties cannot agree.
