Sean M. Sells

The appellants, former commercial insurance salespeople for the respondent, resigned and joined a competitor, subsequently soliciting clients from the respondent.

The respondent successfully sued for breach of a restrictive covenant at trial.

On appeal, the Court of Appeal found the clause was an unenforceable non-competition clause rather than a non-solicitation clause, as it contained no geographical limit and broadly prohibited conducting business.

The appeal was allowed and the trial judgment was set aside.

The appellant employer appealed a trial judgment finding it wrongfully dismissed the respondent employee without just cause and awarding Wallace damages.

The Court of Appeal upheld the finding of wrongful dismissal, noting that while the trial judge did not explicitly refer to the McKinley framework, his factual findings supported the conclusion that the misconduct did not warrant dismissal for cause.

However, the Court set aside the award of Wallace damages because the trial judge based the award on serious findings of misconduct (conspiracy and bad faith counterclaim) that were neither pleaded nor argued by the respondent, depriving the appellant of an opportunity to respond.

The appeal was allowed in part.