In the case of an employee who worked for a competitor during the course of his employment, the Court recently affirmed than an employee holds contractual obligations to safeguard confidential information and implied duties of loyalty, fidelity, and good faith to their employer.
In a decision in which Zubas Flett Law was representing the Employer Plaintiffs, the court held that the employee breached his contractual obligation to safeguard confidential information by emailing Company contracts and proposals to his personal email account. At paragraph 85, the Court states:
[85] However, I find that Mr. Perera breached his obligation under section 6 of the IPA to safeguard and not disclose Confidential Information received from the other party” when, shortly before his departure from Aris, he forwarded to himself the Cando contracts, the proposal to Trent University and the passwords and master password. In my view, these documents/information fall under the definition of “Confidential Information” set out in section 1(a) of the IPA, which includes, among others, “customer information”. While there is no evidence before me that these documents/information were disclosed to others, I have concluded that Mr. Perera sent them to his personal e-mail account with the intention of potentially using and disclosing them in the future, and that this conduct, in itself, constitutes a breach of his obligation to safeguard the confidential information. [Emphasis Added]
Moreover, the Court found that the employee breached his common law duties of loyalty, fidelity, and good faith when he worked for a competitor in the course of his employment, took the Company’s documents for the purposes of competing with the employer, and misused an opportunity that belonged to the Plaintiffs. Justice Vermette held at paragraph 146 (b):
[146] […]
(b)Mr. Perera breached his implied contractual duties of loyalty, fidelity and good faith in that: (i) he was working for a competitor, CBS, during the course of his employment with Aris; (ii) he took with him documentation belonging to Aris for the purpose of potentially using such documentation in competing with Aris; and (iii) he went on a trip with Ms. Serebriakova, the property manager for YCC 86, after his resignation and after YCC 86 terminated its contract with Aris, thereby misusing an opportunity that belonged to Aris and failing to work on transition, as directed by Mr. Mann.
Read the full decision here:
Mann Engineering Ltd. v. Desai, 2021 ONSC 7580
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