ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO.: 190/12SR
DATE: 2012-08-10

BETWEEN:

Measuremax Inc. Plaintiff – and – Mark Nelsons Defendant

J.D. Ayotte, for the Plaintiff
M. Hayes, for the Defendant

HEARD: August 9, 2012

Justice B.A. Glass

Return on Interim Injunction Granted without Notice

[ 1 ] On August 12, 2012, the plaintiff sought and obtained an interim injunction against the defendant without having provided notice to the defendant. The injunction prevented the defendant from communicating directly or indirectly from entering into business relations with suppliers and customers of the plaintiff. The position of Measuremax was that there was a serious question to be tried, that it would suffer irreparable harm if the injunction were not granted, and the balance of convenience was the granting of the injunction.

Background Fact

[ 2 ] Mr. Nelsons had worked for Measuremax for several years as a technical information provider to salespeople. He provided quote preparations and bid preparations. He also helped with service calls and technical matters. He did not visit customers or solicit business for the company because that was handled by outside sales personnel.

[ 3 ] There was no written employment agreement nor was there any non-competition agreement.

[ 4 ] The plaintiff presented to the motions judge for the interim injunction information that the defendant announced on July 23, 2012 that he was leaving the business in 6 weeks. The next day, the plaintiff told him to leave then without notice or compensation. Subsequently, the plaintiff became concerned that the defendant was using his knowledge of the customers to arrange to approach them for his intended new business along with actually doing business for himself while he was working for the plaintiff. E-mails were reviewed demonstrating such activity.

[ 5 ] In response, the defendant disputed that he was conducting his own business while working at Measuremax and denied he issued any invoice for payment to himself in his personal capacity.

[ 6 ] The defendant disputes that he is in a unique position for the company; rather, he is a technical support person without special knowledge about the company operations. Basically, Mr. Nelsons does not occupy an insider position that could jeopardize the security of Measuremax.

[ 7 ] Since he does not have a special position, and since much of the business is with municipalities who use a tendering process in a public way, there is no inside information to be used by him as a former employee.

[ 8 ] With the materials provided by the defendant, it appears that the plaintiff erroneously concluded that the defendant was doing work for himself while still working for the plaintiff and issuing an invoice for $15,000. No invoice has been issued. The work was done by Mr. Nelsons as an employee of Measuremax and not for himself in his personal capacity.

[ 9 ] The defendant submits that there is no urgency facing Measuremax.

[ 10 ] That being the case, Mr. Nelsons submits that Measuremax does not have a strong case for an injunction. At the best, Measuremax is not in a position to suffer irreparable harm. Any harm it might experience can be compensated with damages.

[ 11 ] The balance of convenience is on the side of the former employee who will be placed into the position of not being able to earn any income should the injunction continue. The injunction includes no contact with customers and suppliers. No one will speak to Mr. Nelsons.

[ 12 ] Measuremax disputes that the defendant is in as minor position as he submits. Interfering with customers jeopardizes the business of Measuremax.

Issues

[ 13 ] Does Measuremax meet the requirements for an interim injunction?

[ 14 ] Should the interim injunction continue at least until examinations on the affidavits have been completed and a return on the motion on a long motion day can proceed?

Analysis

[ 15 ] The information provided by the defendant balances out the positions advanced to the motions judge for the interim injunction. More answers have been provided so that the stark factors initially viewed by the motions judge are not so stark.

[ 16 ] It appears to me that Mr. Nelsons is not an employee in a special category with special knowledge or insider information. Rather, he appears to be lower in the chain of command.

[ 17 ] If the employer here could demonstrate that Mr. Nelsons’ actions might upset the judicial apple cart if given notice, or if Measuremax could show that there is urgency to act quickly and a delay for notice to the defendant is critical to the plaintiff. This was addressed by Corbett J. in Robert Half Canada Inc. v. Peter Jeewan (2004), 33 D.C.E.L. (3d) 209 at paragraphs 36-41.

[ 18 ] Not being the holder of special information about the employer and not having such information as trade secrets at his fingertips, Mr. Nelsons cannot have placed Measuremax in a position of jeopardy justifying the issuance of an urgent interim injunction. He is not in the position of being a fiduciary.

[ 19 ] The additional information would likely have resulted in a refusal for an interim injunction. In any event, that information now demonstrates a lack of urgency and reduces the strength of the plaintiff’s case. The plaintiff does not have a strong prima facie case.

[ 20 ] I am not persuaded that Measuremax would suffer irreparable harm if a temporary injunction were not allowed. Rather, any harm can be addressed with damages.

[ 21 ] With respect to the balance of convenience, I conclude it favours the former employee who is entitled to earn a living. Mr. Nelsons is not in a position where he is trading off insider information and trade secrets for Measuremax. The information he has is rather public. The conduct demonstrated through the e-mail messages included in the materials does not lead to the interpretation that Measuremax appears to have interpreted after Mr. Nelsons was told not to return. The party who is in the greatest position of jeopardy is the former employee. There is no evidence to show that Measuremax is suffering losses now or that it did following July 24, 2012.

[ 22 ] The bottom line is that there is not a foundation to continue the interim injunction. The requirements found in RJR-MacDonald Inc. v. Canada (Attorney General), 1994 117 (SCC) , [1994] 1 S.C.R. 311 have not been met.

[ 23 ] Mr. Nelsons is not an employee with extensive access to confidential information that could affect the competitive advantages of Measuremax. The New Brunswick Court of Appeal in Imperial Sheet Metal v. Landry, 2007 NBCA 51 () , [2007] N.B.J. No. 226 addressed this. Such a situation removed the employee from being in the position of a fiduciary.

[ 24 ] As Lauwers J. stated in 1488245 Ontario Ltd. (c.o.b. Riska Medical/Surgical Supply) v. Riska [2010] O.J. No. 5640 , without an enforceable restrictive covenant in an employment contract, a former employer might impose limitations on an employee leaving if the person is in the position of a fiduciary. Such might be found with persons who are management or key personnel with the ability to exercise their authority so as to affect the employer’s economic interest. That is not so with Mr. Nelsons.

Conclusion

[ 25 ] In conclusion, this interim injunction will not be extended.

Justice B.A. Glass

Released: 2012-08-10