Mastronardi Produce Limited v. Veillon, 2015 ONSC 2983
COURT FILE NO.: CV-14-21453
DATE: 20150508
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Mastronardi Produce Limited, Plaintiff
AND:
Christopher Veillon, Defendant
BEFORE: Carey J.
COUNSEL: Gino Morga, for the Plaintiff
Joyce M.D. Thomas, for the Defendant
HEARD: April 22, 2015
ENDORSEMENT
[1] The plaintiff seeks in interlocutory injunction prohibiting the defendant, a former employee, from continuing his employment with Nature Fresh Farms (“Nature Fresh”). The plaintiff asserts that the defendant’s employment with Nature Fresh is in violation of a non-competition clause included in his employment agreement while employed and confirmed upon his termination in December of 2013. The motion is dismissed with costs to the defendant for the reasons as set out below.
Overview
[2] In May 2012 the defendant, Christopher Veillon, was hired as director of marketing by the plaintiff, Mastronardi Produce Limited, which is a distributor of fresh produce throughout North America. Among other things, the terms of the agreement provided that for a period of two years from the date of completion of employment, the employee would not “Accept employment with or engagement with any firm … within the territory if such firm … is a competitor of the corporation or any of the Mastronardi group of companies”.
[3] The plaintiff terminated the defendant on December 23, 2013, alleging cause. He was subsequently provided with a letter indicating his termination was a result of a “re-organization” and was given a $50,000 settlement in lieu of notice. By October 2014, it would appear the defendant had been hired by Nature Fresh in the produce business as well in the Essex County area.
[4] The plaintiff claims that during his employment the defendant necessarily became aware of confidential business plans relating to seed development, as well as marketing schemes and that the plaintiff’s market position is compromised by the defendant’s inside knowledge that he can use to their disadvantage with the competitor firm with which he is now employed.
[5] The defendant denies that Nature Fresh is a “major” competitor of the plaintiff and further denies that he has violated the confidentiality agreement that he signed.
Analysis
[6] The applicable test for a court considering a motion for an interlocutory injunction is set out in RJR-MacDonald v. Canada (Attorney General), 1994 CanLII 117 (SCC), [1994] 1 S.C.R. 311, 111 D.L.R. (4th) 385 as follows:
Is there a serious question to be tried?
Will the moving party suffer irreparable harm if the injunction is not granted? and
Does the balance of convenience favour the granting of an injunction?
[7] The evidence before me fails to satisfy the requirement of this test at each stage.
1. Is there a serious question to be tried?
[8] The injunction sought is one to restrain the breach of a covenant “in restraint of trade”. It is well established that such a covenant is enforceable only if it is reasonable between the parties and with reference to the public interest. In determining reasonableness, the courts have held that several questions must be asked:
a) Is there a protected proprietary interest shown by the plaintiff?
b) Is the restrictive covenant too broad? and
c) Is the covenant unenforceable as being against competition generally?
See Crane-Drummond Inc. v. Hamel 1991 CanLII 14316 (ON SC), [1991] O.J. No. 75, 36 C.P.R. (3d) 151.
[9] The non-competition/confidentiality agreement is set out at tab 2(b) of the plaintiff’s motion record. The agreement does not identify either competitors or clients. Competition is defined very broadly as acts which might be detrimental to the employer “or any of the Mastronardi group of companies”. “Territory” is defined as “all of those geographical areas in which the Corporation and/or any of the Mastronardi Group of Companies conducts business.” The extreme broadness of the language leads me to conclude that it is more likely to restrain competition in general, as opposed to being limited to the solicitation of clients of the plaintiff.
2. Will the moving party suffer irreparable harm if the injunction is not granted?
[10] The agreement is for two years and the parties agreed that it will expire at the end of this year. The examples put forward in the affidavit of Mr. Mastronardi and Mr. Safrance did not, in any way, support the plaintiff’s contention that their business is being harmed. The plaintiff’s contention that the use of Sesame Street characters in the advertising of Nature Fresh is an appropriation of marketing idea of theirs is, on the evidence before me, both untrue and misleading. The copyrighted characters are actually part of a North American wide campaign to encourage school children to eat healthier, conceived by the Produce Marketing Association. As well, the uncontradicted evidence of the defendant is that the Nature Fresh involvement in this campaign pre-dates the plaintiff’s involvement. The other area that is pointed to by the plaintiff is an example of the defendant taking ideas to his new employer relates to the concept of packaging for cucumbers in one package, referred to by the plaintiff as a brick. I have not been persuaded that wrapping four cucumbers in clear plastic is an innovation capable of being protected. The plaintiff has brought forward no evidence that shows that the defendant possessed confidential information from his employment with the plaintiff or used such information to the detriment of the plaintiff.
3. Does the balance of convenience favour the granting of an injunction?
[11] It is charitable to call the plaintiff’s evidence of irreparable harm as underwhelming. On the other hand, if the injunction were granted the defendant would lose his job and his ability to support his family. The balance of convenience favours not granting the plaintiff’s injunction request.
[12] I further find no evidence that the defendant has breached his common law duty to the plaintiff not to use proprietary information, solicit customers or caused any loss of business.
[13] For the reasons given, the plaintiff’s motion is dismissed. I have considered the cost submissions of both parties. Given the timing of the motion, the fact that I found the evidence of the plaintiff as it related to the Sesame Street characters as misleading and given the financial imbalance between the parties, there will be an order of costs against the plaintiff in favour of the defendant fixed at $7,500.
Original signed by Justice Thomas J. Carey
Thomas J. Carey
Justice
Date: May 8, 2015