Court File and Parties

COURT FILE NO.: CV-20-651734-0000 DATE: 2021-04-06 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: B A Folding Cartons AND: Yousuf Sowdagar

BEFORE: J.T. Akbarali J.

COUNSEL: H. Levitt, for the Plaintiff Yousuf Sowdagar, in person

HEARD: In writing

Endorsement

[1] The plaintiff brings this motion seeking a consent order reflecting the settlement of this action.

[2] The action arises out of the employment relationship between the parties. The defendant worked for the plaintiff. In November 2020 he left to go on a vacation, and then abruptly took a leave, which he said he needed to deal with family issues. Eventually he resigned, effective January 4, 2021.

[3] The plaintiff filed a Statement of Claim seeking damages and punitive damages, alleging that the defendant took its confidential information when he left the workplace. The claim alleges that the defendant was a fiduciary, and describes him as an employee whose position “entails some degree of responsibility.” It alleges that an implied term of his contract was that he owes a duty of loyalty to the plaintiff. It alleges that he breached his duty of loyalty and misused confidential information by taking thousands of the plaintiff’s documents and deleting them from the plaintiff’s records.

[4] The Statement of Claim also seeks an interim and interlocutory injunction “restraining the defendant…from competing with the plaintiff or soliciting its customers, business opportunities or employees in its business until this claim is resolved.” Notably, the claim does not seek a permanent injunction.

[5] The claim pleads that the defendant signed an employment contract that included exclusivity, confidentiality, non-disclosure and intellectual property clauses. The pleading does not quote the relevant clauses. There is no pleading that the contract contains a non-competition clause.

[6] The defendant has not defended. Rather, the parties have reached a settlement. The claim is resolved. The plaintiff has filed a consent judgment that includes a paragraph that the defendant “is restrained from…competing with the plaintiff or soliciting its customers, business opportunities or employees in its business for one year.”

[7] The motion materials before me do not include the minutes of settlement. The defendant appears to be self-represented. I do not know if he received legal advice on the settlement.

[8] The motion materials before me do not include the employment contract.

[9] The paragraph in the draft judgment dealing with the non-competition clause is not limited geographically. The pleading supporting the allegation that the defendant is a fiduciary is thin. If a court were asked to enforce a clause in an employment contract with this language, the court would require evidence about its reasonableness. No such evidence is before me. Nor is there evidence to support a conclusion that the defendant is a fiduciary.

[10] Moreover, the non-competition clause in the draft judgment exceeds the bounds of what was sought by the plaintiff in its statement of claim. I see no basis on which the court can award relief that was not sought by the plaintiff in a judgment, especially when that relief is a non-competition clause that the record does not demonstrate to be reasonable, consented to by a party who is self-represented, and may not have had legal advice.

[11] Accordingly, I decline to sign the consent order. I do so without prejudice to the plaintiff’s ability to bring another motion for a court order arising out of this claim on a record that provides a basis for the judgment to be signed as is, or, alternatively, for a revised judgment that addresses the concerns I have raised herein.

[12] The plaintiff shall serve a copy of this endorsement on the defendant within one business day of receiving it.

J.T. Akbarali J.

Date: April 6, 2021