Key Issue: What type of remedy is available to the former ER? Decision: The sales EE’s that left were NOT fiduciaries With respect to the branch manager, he only spent 30% of time managing branch and his discretionary powers were limited, often needed approval from people higher up to make significant decisions, and so even he was not a fiduciary There was no non-compete agreement b/w the EE and the ERs, and is no general duty on non-fiduciary EE’s not to compete This case encourages due diligence on the part of the ER – if you want no competition, you need to put in a no compete clause EE’s DO have an obligation to give reasonable notice prior to resigning The ER can obtain damages for failure to give notice of resignation but cannot also claim damages for competition during this notice period WHY? Post employment duties are restricted to not misusing confidential information (as well as fiduciary duties and restrictive covenants) If there is a loss of profit, it cannot be too remote The branch manager had an implied term in his K, which was to retain RBC’s EEs who were under his supervision – so orchestrating mass resignations by co-workers was a breach of the DGF under the employment K And his actions caused the virtual collapse of RBC RBC was awarded nearly 1.5 million on this finding alone Duty of confidentiality does not necessarily prevent the departing EE from taking client contact information Dissent (Abella) If he/she has competed or made improper use of confidential information Human Rights in Employment Common Law and Legislation At C/L, freedom of contract included freedom to discriminate at will Before human rights legislation, no legal avenue for claim based on discrimination or gender Prohibited grounds of discrimination – race, color, ancestry, place of origin, political belief, religion, marital status, family status, physical or mental disability, sex, sexual orientation, age, or criminal conviction (IF it is unrelated to the employment of that person) The Human Rights Code How the legislation works: S. 2: No intention necessary – discrimination is discrimination
NOTE: If the court had found that the ESA did not provide for an effective enforcement mechanism and therefore the legislature intended for the courts to be involved, the court would have found that the OT provisions were indeed implied terms of K of employment But they didn’t - so there was no claim, and no claim could be certified as class action Crawford says: Decision sounds death knell for class actions in terms of bringing class actions re: employment standards Restrictive Covenants Deal with what you can do after employment. They consist of ongoing obligations on a former EE even after termination of employment Very important mechanisms used by ER’s to protect their proprietary interests Types that will be seen in employment agreements/as appendices to them are: 1. Non-compete agreement – will restrict the EE from working in certain competitive activities for a period of time after termination of employment and within a certain geographic area 2. Non-solicitation agreement Variant 1 – restriction on soliciting customers Unlike non-compete agreement, this is less invasive in that you’re still allowed to compete against your formal ER but you can’t solicit customers you were working with with your former ER Will usually set out geographic limitation Variant 2 – non-solicitation of EE’s Prevents you from getting your colleagues to come with you At c/l, courts generally hostile to restraints of trade Why? Policy: Violate public policy encouraging individual liberty and an individual’s ability to earn a living There is a public interest in free exchange of goods and interests and non-compete clauses run counter to that policy The starting position of the courts is that all restraints of trade are prima facie unenforceable, unless they are reasonable in the public interest So what is a reasonable restrictive covenant? 3-4 factors 1. Geographic scope of the restrictive covenant 2. Length of Time 3. Scope of Activity restricted