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	Looking for New Work and Your Duty to Your Employer: Where Do you Draw the Line?
	by Bernard LeBlanc
	January 2007 - Vol 8 No 4

	One of the most obvious employment trends in recent years has been increasing mobility. Whereas in the 20th century it was not uncommon to work for one employer for an employee’s entire working life, it is now much more common to switch work places more frequently. In many cases, this leads to disputes between former employers and former employees, particularly if the employee jumps to a competitor. While many of these issues are often litigated in the context of either non-competition or non-solicitation agreements, the enforceability of these provisions are sometimes called into question. However, an even more basic question is whether an employee should be negotiating a new position while that employee is still employed with their soon-to-be former employer. The British Columbia Court of Appeal recently considered a case where former employees of RBC Dominion Securities (“DS”) were induced by Merrill Lynch (“ML”) to leave DS and join ML, and to bring client records with them. ML also encouraged these investment advisors to keep their intention of leaving DS a secret. Shortly after they left DS, DS sued ML and others for conspiracy and conversion, and it sued the former employees for breaching employment contracts requiring that they not compete unfairly after leaving employment with DS, and not giving reasonable notice of their intentions to leave. DS also complained about the misuse of confidential information and they alleged breach of fiduciary duties. While DS was partly successful at trial, the Court of Appeal held that DS did not take proper care to protect its interests by obtaining non-competition and non-solicitation clauses from its employees. Therefore, there was no obligation on their part not to compete unfairly with DS once they left. The Court of Appeal also held that the clients did not belong to DS, and that departing employees of DS did not have legal obligations to give DS a reasonable opportunity to persuade any affected clients to remain with DS. Perhaps most surprisingly, the Court indicated that the departing employees were entitled to prepare a client list when leaving DS, although they were not entitled to take copies of accounts or other papers regarding DS clients: see RBC Dominion Securities Inc. v. Merrill Lynch Canada Inc., [2007] B.C.J. No. 48. The Court did find however that because the departing employees took actual client documentation with them, DS was entitled to recover damages for the time spent by their former employees trying to persuade clients to leave. In addition, the Court also upheld the award of punitive damages against their former employees. This case is important for a number of reasons. First, it appears that in the absence of a “non-compete” or “non-solicit” provision in an employment agreement, employees are in fact entitled to negotiate new positions with perspective employers even while employed by their soon to be former employer. On the other hand, there are clear limits to the nature of the information that departing employees can take with them even in the absence of such provisions. In this case, and cases like it, the Court always tries to strike a reasonable balance between the right of professionals to work where they wish on the one hand, and the interest of their former employers on the other. While this decision should not necessarily hinder the mobility of most employees or practitioners, it does point out that there are limits to how far the departing employees can go. [Professional Practice and Liability on the Net is a monthly Internet newsletter addressing issue of interest to a wide range of professionals. Please consult with a lawyer for specific legal advice. If you wish to be removed from the list of subscribers, please simply reply to this email. If you wish to reprint this article, please provide appropriate credit, and send a copy of the publication to, Steinecke Maciura LeBlanc, 393 University Avenue, Suite 2000, Toronto M5G 1E6. Or, call 599-2200, ext. 232, or email: bleblanc@sml-law.com. Visit our website at http://www.sml-law.com. Comments and suggestions are also welcome.]



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	Professional Practice and Liability on the Net is a monthly internet newsletter addressing issues of interest to a wide range of professionals. Please consult with a lawyer for specific legal advice. If you wish to be removed from the list of subscribers, please simply reply to this email. If you wish to reprint this article, please provide appropriate credit, and send a copy of the publication to, Steinecke Maciura LeBlanc, 401 Bay Street, Suite 2308, P.O. Box 23, Toronto, ON M5H 2Y4. Or, call 599-2200, ext. 232, or email bleblanc@sml-law.com. Comments and suggestions are also welcome.