Court of Appeal for Ontario

Citation: Donaldson Travel Inc. v. Murphy, 2016 ONCA 649

Date: 2016-08-30

Docket: C61838

Before: Feldman, Simmons and Lauwers JJ.A.

Between:

Donaldson Travel Inc.

Plaintiff (Appellant)

and

Mary Murphy, Peter Van Der Heyden and 1631318 Ontario Inc.

Defendants (Respondents)

Counsel:

John W. McDonald, for the appellant

Gary E. Flaxbard, for the respondent Mary Murphy

Patricia J. Forte, for the respondents Peter Van Der Heyden and 1631318 Ontario Inc.

Heard: August 22, 2016

On appeal from the order of Justice David A. Broad of the Superior Court of Justice, dated February 5, 2016 and the cost order dated February 26, 2016, with reasons reported at 2016 ONSC 740 and 2016 ONSC 1396.

ENDORSEMENT

[1] The appellant travel agency appeals from an order made on a summary judgment motion dismissing its claims for breach of contract, misappropriation of confidential information, inducing breach of contract and interference with contractual relations against a former employee travel agent and her new travel agency employer.

[2] The issues on appeal boil down to whether the motion judge erred: i) in interpreting the restrictive covenant in the respondent former employee's employment contract with the appellant as a non-competition clause as opposed to a non-solicitation clause and in therefore finding it unreasonable and unenforceable; and ii) in finding that the former employee had not misappropriated the appellant's confidential information.

[3] We see no error in the motion judge's finding that the restrictive covenant was a non-competition clause. The covenant at issue provides as follows:

[The personal respondent] agrees that in the event of termination or resignation that she will not solicit or accept business from any corporate accounts or customers that are serviced by [the appellant], directly, or indirectly.

[4] Based primarily on the language "or accept business" the motion judge found that the clause at issue restricts competition and is not merely a non-solicitation clause.

[5] We see no error in this conclusion. The motion judge's interpretation was available based on the plain wording of the clause. The fact that the appellant abandoned previous employment contracts containing more restrictive non-competition clauses and that its policy manual required only that employees sign a non-solicitation agreement does not change this conclusion. We see no basis on which to interfere with the motion judge's finding. Further, given that the restrictive covenant is a non-competition clause (as opposed to a non-solicitation clause) and also because it contains no temporal limitation, there is no basis on which to interfere with the motion judge's conclusion that the clause is unreasonable and therefore unenforceable: J.G. Collins Insurance Agencies Ltd. v. Elsley, 1978 CanLII 7 (SCC), [1978] 2 S.C.R. 916, at para. 19; H.L. Staebler Co. v. Allan, 2008 ONCA 576, 92 O.R. (3d) 107, at para. 36. The appellant's arguments concerning severance of the phrase "or accept business" have no merit: [Shafron v. KRG Insurance Brokers (Western) Inc