In the case of Traffic Tech Inc. v. Maiore, the Superior Court ruled on an application for a provisional, interlocutory, and permanent injunction arising from alleged violations of post-employment obligations. The employer, a transportation company operating across North America, sought the intervention of the Court against three former employees who had resigned in 2021 and began working for a competitor the following day.
Of the three employees, one was an executive account manager whose employment contract contained a confidentiality clause, but no non-competition or non-solicitation clauses. It also required that four weeks’ notice be given prior to resignation. By contrast, the two remaining employees, both customer service representatives, were subject to contracts containing non-competition and non-solicitation clauses. These clauses prohibited them from working “anywhere in the greater Montreal area… for a period of 6 months following the date of resignation”[1] and from soliciting the company’s clients for a period of one year thereafter. Unlike the executive account manager’s contract, however, their contracts imposed no notice requirement in the event of resignation.
In alleging breaches of post-employment obligations, the employer relied on the following conduct of the three employees: their coordinated and immediate resignations, the return of company property through the new employer’s courier service, their immediate transition to a competing business, and the alleged solicitation of one of the employer’s long-standing customers. On the basis of these allegations, the employer sought a provisional injunction prohibiting the three former employees from offering their services to the new employer, and prohibiting the latter from retaining their services, for a period of ten days, in addition to non-solicitation orders.
In assessing the merits of the application, the Court relied on the criteria elaborated on in Groupe CRH Canada Inc. v. Beauregard [2], according to which an interlocutory injunction will only be granted where there is a serious issue to be tried, irreparable harm is established, and the balance of convenience weighs in favour of the applicant. Furthermore, when a provisional injunction is requested, an additional requirement of proof of urgency is necessary.
The Court accepted the establishment of urgency, noting that cases involving alleged breaches of non-competition obligations are generally be considered urgent. However, it concluded that there was no serious issue to be tried against the executive account manager, since the manager had not signed a non-competition clause and he was therefore subject to limited post-employment obligations, apart from the general duty of good faith under civil law. Based on the evidence shown, the Court was not satisfied that the manager had acted disloyally, improperly solicited clients, or retained confidential information.
As for the two customer service representatives, although their contracts included non-competition clauses, the Court expressed doubts as to their validity, given the nature of their roles, their lack of direct client contact, and the broad scope of the restrictions. The employer also failed to establish irreparable harm, since the alleged losses were speculative and compensable in damages. The application for injunctive relief was therefore dismissed.
The following paragraphs are particularly relevant to the Court’s analysis of the request:
[39] In the absence of a non-competition undertaking, post-employment obligations are much less stringent…
(…)
[43] The Court does not, on the basis of the limited evidence, find that there is unwarranted solicitation, being an insistent and repeated communication in order to divert business. The sworn declarations establish, for the time being, that Children’s Place was dissatisfied with Traffic Tech’s services and was looking for other suppliers.
(…)
[50] The Court comes to the conclusion that Traffic Tech has not appearance of right against Maiore. There is consequently no issue to be tried.
(…)
[52] In light of Maiore’s terms of employment, one wonders why it is necessary for the protection of Traffic Tech’s interests to impose non-competition obligations on customer service representatives, which have no direct contact with customers.
(…)
[64] Given the lack of irreparable harm, it is unnecessary to examine the balance of convenience. In light of Traffic Tech’s size compared to the defendants’ livelihood, the latter would have been favoured.
[1] Traffic Tech Inc. c. Maiore, 2021 QCCA 2246, par. 10.
[2] Groupe CRH Canada inc. c. Beauregard, 2018 QCCA 1063.