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CCCA_V5No2_Dept-EmploymentLaw-FIN.qxd:CCCA_V1No2_Dept-CourtLeg-V1.qxd 5/5/11 11:45 PM Page 17 Employment Law When employees cross the street Lost your best business brains to a competitor? There is something youcan do. By NikolayY. Chsherbinin ly about persuading a con- court found that the trial judge erred in tractor to defect, gets con- imposing liability under the inducement sistently confused with the tort, when there was no valid contract. In interference tort and the SAR Petroleum Inc. v. Peace Hills Trust Co., tort of causing loss. 2009 Carswell NB 307, the New Though all of these eco- Brunswick Court of Queen’s Bench nomic torts havestrict found that themotion judgemistakenly requirements of intention, identified “an intention to cause loss” as one what the defendant intends of the essential elements of the induce- is different in each tort. ment tort,despite it being the key element Where the inducement of thetort of causing loss. n today’s competitive marketplace, it’s tort is alleged, the “old” employer must More recently, in Alleslev-Krofchak v. Inot uncommon for organizations to prove that the rival intended to and actual- Valcom Limited, 2010 ONCA 557, the induce skilled professionals to defect ly procured a breach of the employee’s con- Ontario Court of Appeal found that the from corporate rivals.Obviously,it is not tract. Under the interference tort the rival trial judge erred in finding that “frustrating automatically improper to poach must intend to injure a complainant, while [of]…contract could satisfy the requirement of employees from rivals, but defections the tort of causing loss requires the rival to the inducement tort,”which it cannot.Finally, can cause organizations to suffer eco- intend to causeloss. in Johnson v.BFI Canada,2010 MBCA 101, nomic loss or other harm; for example, While these economic torts enable old the Manitoba Court of Appeal found that when the “brains” of a business is employers to effectively attack the real thetrial judgemischaracterized thecause induced to join a competitor and others cause of their economic harm,it is impera- of action,since he described and dealt with follow.This article discusses some of the tivethat both in-houseand outsidecounsel the interference tort rather than the contractual, equitable and common law learn to clearly distinguish between their inducement tort. devices available to the “old” employer, scope,elements and rationales.Arguably,the with emphasis on the frequently con- complexity of this branch of the law stems Equity: Injunctive Relief fused economic torts of inducing breach largely from the fact that trial judges con- An award of damages at the end of a lengthy of contract (inducement tort) and inten- tinueto confusetheseseemingly similar,yet lawsuit is often insufficient to protect the tional interference with contractual rela- fundamentally distinct economic torts. old employers or remedy their actual eco- tions (interference tort) and causing loss For example, in Drouillard v. Cogeco nomic loss. Faced with unlawful competi- by unlawful means (tort of causing loss). CableInc., 2007 ONCA 322, theOntario tion or the misappropriation of their confi- Court of Appeal reversed the trial judge’s dential information,employers need imme- Complex and confusing decision which mistakenly awarded dam- diate relief. This has led to the remedy of If a rival persuades an employee to breach ages under the interference tort, as injunctive relief, which bars ex-employees ISTOCKPHOTO her existing employment contract with her opposed to the inducement tort it consid- and their new employers from continuing their improper behaviour. current employer, it commits the induce- ered. In O’Dwyer v. Ontario (Racing Injunction is a potentially powerful legal ment tort.This tort,which is fundamental- Commission), 2008 ONCA 446, thesame ÉTÉ 2011 CCCA Canadian Corporate Counsel Association 17