Employer discovers emails, business activities during executive's employment
Ontario's Superior Court of Justice recently dealt with a case that questioned the boundaries between career planning and breaching employment duties.
The dispute arose after a long-serving executive was dismissed when his employer discovered concerning email patterns and business activities conducted during his employment.
The court had to balance an employee's right to prepare for future opportunities against their fundamental duties of loyalty and confidentiality.
The decision highlighted important lessons about using company resources, involving subordinates in competing ventures, and handling confidential information during employment.
Employer flags multiple emails
The worker served as an assistant vice-president at a Canadian bank for 15 years, managing international student banking products. He oversaw Guaranteed Investment Certificates (GICs) for foreign students seeking Canadian visas and managed a tuition payment processing program between the bank and community colleges.
In October 2020, the bank's data protection system flagged multiple emails sent from the worker's corporate email to his personal address.
Some contained private information, including social insurance numbers. This discovery triggered a formal investigation.
Investigation into worker’s email activities
While the worker supervised several staff in Canada and India, his authority was limited. As the court noted: "I find that [the worker] did not have a high degree of autonomy to exercise his power, discretion, or control to affect [the employer's] legal or substantial practical interests, and that [the employer] was not vulnerable to the exercise of any discretion that [the worker] did have."
The investigation revealed concerning activities. The worker had shared an 18-page confidential sourcing agreement with a competitor bank and incorporated a company with two subordinates to offer similar services.
The court stated: "The Investigation Committee found that [the worker], while employed at [the employer], intended to and took positive steps to enter into a business in competition with [the employer's] Student Direct Program between November 2019 and October 2020 in contravention of [the employer's] Code of Conduct and in contravention of his employment agreement."
Alleged disclosure of confidential information
The court examined whether these actions breached the worker's fundamental duties. It found: "[The worker] was required to provide full-time service to [the employer], to refrain from competing with [the employer], and to refrain from disclosing [the employer's] confidential information. These duties are based both in common law and in the contractual terms of [the worker's] employment."
The worker maintained that the information he shared wasn't truly confidential. He argued that discussions about future opportunities happened during lunch hours and personal time.
He also claimed that his actions were part of normal career planning and that any wrongdoings were minor.
During the formal interview, the worker's responses raised additional concerns. The court observed: "When confronted with the [documents] in the interview, [the worker] first said that [the company] was incorporated on behalf of [the employer], and eventually said it was a contingency plan in case he had to leave [the employer]."
Using employer’s resources for future plans
The court emphasised that while employees can plan for their futures, there are clear limits. The decision stated: "[The worker] was not free, while employed, to use his employer's resources to his advantage and the potential detriment of the employer. He was not free to involve his subordinates in his plans. He was not free to be dishonest to his employer about these activities when confronted with them."
The court upheld the dismissal, finding the breaches substantial enough to warrant termination without notice: "I find that [the employer] has proven on the balance of probabilities that the nature and extent of [the worker's] misconduct warrants summary dismissal. The breaches I have found above are serious. They go to the heart of the employment relationship, engaging basic duties of loyalty and honesty."
The decision concluded by noting: "[The worker] effectively repudiated the employment contract by sharing confidential documents and information with competitors, planning with his subordinates to defect and compete with [the employer] and taking steps toward doing so while still employed with [the employer]."
The case provided clear guidance about the boundaries between legitimate career planning and breaching employment duties. It reinforced that while workers can plan their futures, they must do so without compromising their current employment obligations or misusing company resources.