Ontario courts demonstrate that employers are not powerless when former employees breach confidentiality obligations or engage in retaliatory conduct. In a recent decision, the Ontario Superior Court of Justice (“ONSC”) confirmed that employers have meaningful recourse against former employees who engage in misconduct following their termination—particularly where they misuse confidential information and cause reputational harm.

Background

The ONSC noted the employee in default, such that the allegations against him were accepted as true. These allegations included that:

• The employee was a former senior employee of the employer whose employment was terminated without cause.
• His employment agreement contained confidentiality obligations that continued post-employment. The employee further signed and executed a full and final release following his dismissal that restricted him from being able to bring any employment related claims against the employer.
• Following his departure, the employee retained confidential information and trade secrets belonging to the employer. The employee then embarked on a campaign of harassment and defamation. He began by repeatedly contacting his former manager, frequently calling her and sending her emails and text messages.
• The employee then escalated to contacting clients and other employees, sending disparaging emails and offering to disclose sensitive information. The employee also used aliases in some of the emails and attempted to extort money from the employer in exchange for stopping the disparaging communications. In addition, the employee posted hundreds of negative reviews on the employer’s Google Business Page, forcing the employer to shut down their page and impeding its ability to compete.

In response, the employer sought relief against the employee, including requests for an interlocutory injunction, an Anton Piller order, and the return of its confidential information.

The Court’s Decision

The ONSC granted the employer’s requested relief, finding that the legal tests for both an interlocutory injunction and the Anton Piller order had been met.

The ONSC determined that the misuse of confidential information gave rise to a serious issue to be tried. The ONSC found that the employee’s post-employment conduct breached clear confidentiality obligations and caused reputational and business harm to the employer.

Anton Piller orders (which are effectively civil search warrants), allow for the civil search and seizure of evidence, and are among the most powerful and intrusive remedies available in civil litigation – as a result, they are rarely awarded. In this case, the ONSC found that the employer had met the high threshold based on the following findings:

• There was a strong case that the employee had downloaded the employer’s confidential information onto a hard drive;
• There was serious potential for damage to the employer’s business from the misconduct, as the employer risked losing key clients from the disparaging emails the employee sent; and
• There was a real risk that the evidence would be destroyed without court intervention given the employee’s conduct.

As a result, the ONSC ordered the employee to return and delete all confidential information, surrender his computer for inspection, and cease all further harassment. The ONSC also awarded costs of over $34,000 to the employer.

Takeaways for Employers

This decision serves as a welcome reminder that where employees breach their post-employment obligations, or engage in misconduct that harms the employer, there are meaningful remedies that are available to employers to protect their organization.

1. Ensure Fulsome Employment Agreements and Policies Are In Place

To set confidentiality and post-employment expectations, employers should ensure that they have robust employment agreements and policies that delineate employees’ confidentiality obligations and clearly defines what constitutes confidential information and the obligations that apply after employment ends.

2. Maintain Detailed Records

Keeping detailed records—such as emails, complaints, or online activity—can be critical in persuading a court to grant relief in favour of the employer. Employers should ensure they document and preserve all relevant communications and misconduct by the employee.

3. Move Quickly When Post-Employment Breaches Are Discovered

As the decision demonstrates, the court can grant powerful remedies to protect an employer where an employee is engaged in misconduct that has a material impact on the employer’s business. Some of these powers are available only if the employer acts very quickly, so it is critical that employers act swiftly and seek legal advice on how to protect themselves where these situations occur.

This blog is provided as an information service and summary of workplace legal issues.

This information is not intended as legal advice.