Court File and Parties

COURT FILE NO.: CV-15-539959

DATE: 20221110

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

EF INSTITUTE FOR CULTURAL EXCHANGE LIMITED

Plaintiff

– and –

WORLDSTRIDES CANADA INC. and DAVID CONKLIN.

Defendants

Counsel:

Bryan Fromstein Lawyers for the Plaintiff

Bradley E. Berg, Naiara Toker and Alysha Li, Lawyers for the Defendants

HEARD: AUGUST 25, 2022

G. DOW, J.

REASONS FOR DECISION

[1] The defendants seeks summary judgment dismissing this action which the plaintiff opposes. The plaintiff submits this matter is a “trial in a box” which should proceed to trial. Alternatively, it requests it be granted judgment as provided for under the applicable case law.

Background

[2] The defendant, David Conklin began his employment with the plaintiff on May 30, 2005. He rose to the position of president as of October, 2011. Both corporate litigants are the Canadian operation of global companies competing in the educational tour business.

[3] David Conklin subsequently signed an employment agreement which included broad terms regarding confidential information, the breach of which could result in termination for just cause.

[4] There was no evidence of any concern or breach of confidentiality by David Conklin prior to his dismissal, without cause, on September 9, 2014.

[5] For the purposes of subsequent evidence and submissions, the defendant relied on the existence of promotional trips for teachers to Costa Rica going back to 2003 as well as trips to Vimy Ridge, particularly on the 95th anniversary of that particularly Canadian World War I event in 2012. The corporate litigants are two of multiple companies which successfully offered and conducted tours of Vimy Ridge in 2012.

[6] On his termination, David Conklin and the plaintiff negotiated a severance package effective September 30, 2013, the key terms being:

a) payment of $225,000.00 in two tranches, the first within 30 days of the signed severance agreement and the second on the one year anniversary of the termination when the one year confidentiality clause referred to below expired;

b) outplacement services being provided at the plaintiff’s expense up to $5,000.00;

c) compliance with Article 7 of the Employment Contract regarding not sharing confidential information for one year; and

d) breach of the confidentiality agreement would result both “in addition and to the companies’ right to obtain damages and injunctive relief”, forfeiture of the second payment of the $112,500.00.

[7] The defendants accepted the terms imposed for the purpose of this motion. David Conklin utilized the outplacement services to revise his resume which was sent to various competitors of the plaintiff, portions of which will be referenced below. He followed up with direct contact and this resulted in his speaking with Jim Hall, then President and CEO of WorldStrides International, with its office in Charlottesville, Virginia, in March, 2015.

[8] David Conklin’s evidence of his advising Mr. Hall of the confidentiality obligation is uncontradicted. A meeting was arranged and Mr. Conklin travelled to Charlottesville and met with Mr. Hall along with other executives of WorldStrides International on April 27 and 28, 2015.

[9] Given his past employment with the plaintiff, the travel arrangements came to the attention of the plaintiff. A letter dated May 5, 2015 from the plaintiff’s corporate counsel was sent to Mr. Conklin reminding him of his obligations.

[10] The key meeting in Charlottesville is with Jim Creighton whose notes (but no evidence) have been produced. The seriousness of maintaining confidentiality in this type of business is reenforced by Mr. Conklin signing WorldStrides’ confidentiality agreement on April 22, 2015 at WorldStrides’ request and before being interviewed.

[11] Following the meeting, Mr. Conklin sent to WorldStrides copies of his employment agreement and termination agreement.

[12] A May 22, 2015 email from David Shriver, a Regional Sales Manager with WorldStrides International is relied on for its comment of promoting a “massive campaign to celebrate the 100th anniversary at Vimy Ridge in 2017” and being “behind EF and Explorica with this”. It should be noted that at that moment in time, Explorica is a competitor to both corporate litigants. No evidence of where Mr. Shriver got this information from was put forward.

[13] On May 25, 2015 Mr. Conklin was contacted by Carolyn Morgan, a recently terminated employee of the plaintiff seeking his advice about the terms of her termination. The responding email from David Conklin included that the proposed termination agreement looked “pretty standard” and raised whether any bonuses had been accrued. No evidence of whether this changed the terms of Ms. Morgan’s termination was tendered. In addition, Mr. Conklin reminded her of the confidential nature of the offer, that is, questioning whether it was appropriate to review it with him.

[14] On June 2, 2015 Mr. Conklin was verbally offered a position as General Manager of WorldStrides to open a Toronto office and build the Canadian end of the business. On June 5, 2015 Mr Conklin had lunch with Adam Singer, then Vice-President Finance for the plaintiff and the meeting with WorldStrides was raised. On June 18, Mr. Conklin agreed in principle to the offer for employment to commence October 1.

[15] On August 7, Mr. Conklin spoke on the phone with Peter Adams, a Senior Vice-President of WorldStrides International about the location of office space in Toronto. Emails produced confirmed the contact.

[16] A second lunch with Adam Singer occurred on September 14 in which Mr. Conklin confirmed his new position and Adam Singer expressed being “happy for him”. On September 15, Peter Adams contacted Mr. Conklin to advise of the need to begin interviewing salespeople on or after he commences employment on October 1.

[17] On September 30, Adam Singer approved payment of the second tranche of $112,500.00 to David Conklin.

[18] On October 12, 2015, General Counsel for the plaintiff wrote to David Conklin reminding him of “ongoing obligations to the Company and the EF group of companies” and by November 18, 2015, the plaintiff was seeking interim and interlocutory injunctive relief, in particular regarding the defendant’s 2017 Vimy Ridge tours. That motion was subsequently dismissed.

Analysis

[19] The plaintiff relied on the direction given by the Court of Appeal in Royal Bank of Canada v. 1643937 Ontario Inc. et al., 2021 ONCA 98 and the analytical approach to follow. The first step is to determine if there was a genuine issue requiring a trial based on the evidence before the court (at paragraph 24). The onus is on the defendants in this case to demonstrate on the evidence that there is no genuine issue for trial. The evidence summarized above details the nature and extent of David Conklin’s contact with WorldStrides during his one-year confidentiality obligation.

[20] In its submissions, the plaintiff directed me to incidents of where David Conklin’s evidence was contradicted or raised issues about his credibility. The first instance was an email exchange between Jim Hall and David Conklin dated March 10, 2015 where references was made to a (presumably telephone) call that sets up the subsequent meeting in Charlottesville and includes delivery of David Conklin’s curriculum vitae to the corporate defendant. The plaintiff submits that the curriculum vitae violated the confidentiality requirement by its content. This was despite uncontradicted evidence that the curriculum vitae was modified with input from Knightbridge, the outplacement services company provided to David Conklin at the plaintiff’s expense.

[21] The plaintiff relied on the parts of the curriculum vitae which identified:

a) an annual growth rate for revenue of more than 10% from 2005 to 2014;

b) stating regionalization was a key to driving growth; and

c) improved reduction of employee turnover from 30% to less than 20% was made by transitioning the culture to a more open sharing environment where staff participation was encouraged.

[22] I find that these statements of achievements do not amount to any breach of the confidentiality commitment David Conklin made to the plaintiff. I rely on the statement of the law made in J.G. Collins Insurance Agencies Ltd. v. Elsley Estate, 1978 CanLII 7 (SCC), [1978] 2 S.C.R. 916 where the Court stated (at page 923) that the principles to be applied are well established and the assessment of opposing interests used reasonableness “in the peculiar circumstances of the particular case”. Here, the contents of achievements contained in the curriculum vitae do not disclose any sensitive financial results. I am reinforced in this conclusion by the defendants’ reliance on Matthew Noble’s Linkedin page as president of E.F. Educational Tours of Canada of what I find to be similar type information, where he quantifies “Leading a team of 150+ across three offices”.

[23] The plaintiff also relied on the May 22, 2015 email of David Shriver indicating the corporate defendant’s intention to mount a “massive” campaign for the 100th anniversary of the Vimy Ridge battle. Again, there was no evidence linking any activity by David Conklin to this business decision. It was a logical, if not obvious, decision given the existence and success of the 95th anniversary tours to Vimy Ridge. Further, it included being behind Explorica, a competitor at the time as well as the plaintiff. I find it unreasonable in these particular circumstances to conclude any breach of David Conklin’s confidentially duty occurred.

[24] Regarding the advice given to Carolyn Morgan in the May 25, 2015 email, there is a basis for concern. Certainly, it would clearly not have been a breach of David Conklin’s confidentiality duty to have just declined to review or comment on the terms of termination. In my view, what tips the balance in favour of the plaintiff was the suggestion by David Conklin of any accrued bonus being pursued. However, this leads to the plaintiff having tendered evidence that David Conklin’s suggestion resulted in some kind of financial loss or additional payment to Carolyn Morgan. Such evidence was not presented. Again, applying what is reasonable in the particular case, there was no actionable breach by David Conklin of his confidentiality duty.

[25] The plaintiff also relied on an expert report which attempted to quantify the alleged disgorgement suffered by the plaintiff of the profits made by WorldStrides from the 2017 Vimy Ridge tours. The defendant quantified this to be $35,657.00. This was in addition to entitlement to the return of the second payment of $112,500.00 made to David Conklin on September 30, 2015.

[26] However, I am not satisfied the evidence supports such a claim. Multiple education tour companies organized and conducted profitable trips to Vimy Ridge in 2012 on the 95th anniversary and did so again on the 2107 to celebrate the 100th anniversary. Such information was known to the parties without any disclosure or breach by David Conklin of his confidentiality obligation. There was no evidence of any customer or supplier that switched its business dealings with the plaintiff to the corporate defendant during the one year period up to September 30, 2015 or in the year following.

[27] I also find there was no breach of any fiduciary duty on the part of David Conklin in his dealings with WorldStrides prior to September 30, 2015. In this regard, I rely on the circumstances that arose in Guzzo v. Randazzo, 2015 ONSC 6936 (at paragraphs 167-194). In this regard, a meeting with a perspective future employer that is a competitor is not, on its own, a breach of any fiduciary duty. Here, the existence of the confidentiality obligation on David Conklin was not only disclosed but precisely set out by the forwarding of its terms to WorldStrides as part of the recruitment process.

[28] As a result of my findings, it is not necessary to proceed with the second step of determining if a trial could be avoided using the enhanced powers under Rule 20.04(2.1).

[29] The plaintiff submits the lack of evidence from various individuals at WorldStrides supports its position that this matter should proceed to trial. I disagree. Part of the process and purpose of a summary judgment motion is to highlight and/or detail the evidence that either supports or undermines the existence of triable issues. I find it on the evidence before me that there is no genuine issue for trial.

Conclusion

[30] The defendants’ request for summary judgment dismissing this action is granted.

Costs

[31] The plaintiff uploaded its Costs Outline in the amount of $22,031.00 for partial indemnity fees plus HST and disbursements of $4,014.00 (including HST) for a total of $28,909.03. Given the potential outcomes, it also uploaded a Bill of Costs (of the action) excluding the summary judgment motion. That is, an additional $19,500.00 for partial indemnity fees plus HST and disbursements of $4,109.63 (inclusive of HST) for a total of $26,144.63. The combined total of the two accounts is $55,053.66.

[32] Counsel for the defendants did not upload its claim for costs. On September 27, 2022 I requested they do so by email and was reminded their material included reference to an Offer to Settle. I advised them to redact that reference and received the defendant’s revised claim for costs by email about 90 minutes later. They seek $169,814.50 for partial indemnity fees, plus HST and disbursements of $7,148.10 (inclusive of HST) for a total of $199,038.48.

[33] There is clearly a disparate amount being claimed by each side. This may be reflected in the plaintiff having only the lawyer with carriage (for the 2005 call) and a law clerk attending to the file at hourly rates of $425.00 and $150.00 per hour respectively. This compares with the defendants’ Costs Outline which identified 10 different lawyers with hourly rates (using substantial indemnity as 90% of actual rates) between $466.00 per hour (for the 2022 call) to $833.00 per year (for the 1994 call).

[34] I urge the parties to agree on costs. For their guidance in these discussions, I intend to rely on the statement in Boucher et al. v. Public Accountants Counsel for the Province of Ontario et al. 2004 CanLII 14579 (ON CA), [2004] O.J. No. 2634, (at paragraph 26) that “the objective is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceeding, rather than an amount fixed by the actual costs incurred by the successful litigant”.

[35] Should the parties be unable to agree on costs in the next 30 days, the defendants shall submit to me by email to my assistant, its claim for costs and the reasons supporting same limited to five double spaced typewritten pages in a readable font excluding any required attachments such as the Offer to Settle, if being relied on, on or before December 15, 2022. The plaintiff shall then have until January 6, 2023 to provide its responding position, identically limited.

_____________________________ Mr. Justice G. Dow

Released: November 10, 2022

COURT FILE NO.: CV-15-539959

DATE: 20221110

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

EF INSTITUTE FOR CULTURAL EXCHANGE LIMITED

Plaintiff

– and –

WORLDSTRIDES CANADA INC. and DAVID CONKLIN.

Defendants

REASONS FOR DECISION

Mr. Justice G. Dow

Released: November 10, 2022