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5/5/11 CCCA_V5No2_Dept-EmploymentLaw-FIN.qxd:CCCA_V1No2_Dept-CourtLeg-V1.qxd Employment Law tiveness of the remedy requires it.“ [The injunction] may serve 11:46 PM Page 18 termination clause and a probation- weapon, which facilitates speedy ary employment clause. Employers interim relief and may be extended to protect or defeat who insist upon such clauses in writ- to restrain third parties if the effec- limit exposure to increased damages However, because it is a discre- employers’ objective to avoid ten employment contacts not only tionary remedy, the courts need to economic loss. but are treating the respective see fairly strong evidence of the old ” employee in a fair and reasonable employer’s case before granting an manner. Conversely, defecting em- injunction against the departing employee that the changes were fundamental enough ployees should undergo thorough exit and his new employer. To succeed, the to amount to a constructive dismissal, interviews, during which employers should employer must show that it will suffer thereby rendering the non-solicitation remind them of their ex post employment harm that cannot be adequately compen- clause void.This case illustrates that in a sit- contractual obligations. sated in damages. I note parenthetically uation where the employee’s actions appear This article demonstrates that there is an that information that is found to be confi- to be the result of changes first initiated by armoury of legal devices available to old dential in one case may not be found as the employer,the chances of success on the employers to prevent and remedy their such in another.What is important is the injunction are remote. economic loss caused by defecting employ- nature of the information in relation to the ees or competitors.It illustrates that there is particular business and how that informa- Minimizing liability an obvious need for the courts to exercise tion is treated by the employer. When recruiting rivals’ employees away to caution when relying on the doctrine of The injunction is a double-edged sword. join their companies, employers can take stare decisis and apply more analytical It may serve to protect or defeat employers’ proactive steps to avoid or,at least,minimize approach to the economic torts. Finally, it objective to avoid economic loss.A case in their liability based on the inducement fac- reminds employers about the benefits of point is Allstate Insurance Co. of Canada v. tor. For example,what happens when a rival injunctions and well-written employment Larocque (2008),64 C.C.E.L.(3d) 119 (Ont. persuades an employee to leave previous contracts. S.C.J.), where the employer intending to secure employment to join the rival’s firm protect its business interests introduced by offering him various enticements, but NikolayY. Chsherbinin is an employment drastic changes to the employee’s contract thereafter dismisses the employee? Em- lawyer at Grosman, Grosman & Gale LLP. He and thereafter sought to enjoin him from ployers may defeat the employees’ claims to is currently working on his first legal book,The soliciting customers for a 24-month period. additional compensation, based on the Law of Inducement in Canadian Employment The court refused to grant the employer inducement factor,by making them sign an Law. He can be reached at 416-364-9599 or injunctive relief, because it was concerned employment contract that includes a lawful nikolayc@grosman.com. Inducement Tort Interference Tort Tort of Causing Loss The defendant’s wrongful interference Interference with the plaintiff’s business The knowledge of contract with the actions of a third party in which or livelihood by unlawful means the plaintiff has an economic interest Intention to procure the breach of contract An intention to injure the plaintiff Intention to cause loss to the plaintiff Actual breach of contract Use by the defendant of unlawful means Loss in any form, for example, frustration Damage Economic loss caused to the plaintiff of economic expectations Lack of justification 18 CCCA Canadian Corporate Counsel Association SUMMER 2011