Over $19 Million Award Against Employees Upheld By Court of Appeal

Osgoode Hall Court of Appeal

The Court of Appeal for Ontario upheld the Ontario Superior Court of Justice’s decision in GasTOPS Ltd. v. Forsyth (“GasTOPS”) awarding the Employer damages in the amount of $12,306,495.00, plus pre-judgment interest of $3,039,944.00 and costs of $4,252,920.24.

Background and Ontario Superior Court of Justice’s Decision

For a summary of the background on this case and the Ontario Superior Court of Justice’s decision, please review our published article entitled “Employer Entitled to 10 Months’ Notice: Court”.

Ontario Court of Appeal’s Decision

The Employees appealed the Ontario Superior Court of Justice’s decision arguing that two of the Employees did not owe a Fiduciary Duty to the Employer, that the “accounting period” to determine the damages should not have been ten years, that certain amounts should not have been included in calculating the amount of damages, that the Employees should not be held jointly and severally liable for the damages awarded, and that the trial costs should not have been awarded on a full indemnity basis.

After reviewing each of the issues on appeal raised by the Employees, as well as the Employer’s cross appeal seeking that the Employees be permanently restricted “from using the information taken in breach of confidence or should be required to disgorge [the Employees’] profits” indefinitely, the Court of Appeal for Ontario found no reason to interfere with the Trial Judge’s decision and dismissed both the appeal and cross appeal on all fronts.

Points of Interest

As indicated in our blog on the Ontario Superior Court of Justice’s decision referred to above, the decision in GasTOPS, now upheld by the highest court of Ontario, demonstrates that there are instances when providing reasonable Notice is also the employee’s responsibility and that the usual two weeks’ notice will not always be sufficient. Furthermore, the decision by the Court of Appeal reinforces that employees who violate this responsibility, knowing that their actions will harm the employer, may be held financially accountable by the Courts, and that such amounts can be as extreme as those indicated above.

It will be interesting to see as to whether this decision will be appealed to the Supreme Court of Canada, and if so, whether the highest court in the country will uphold the Court of Appeal’s decision, reduce the award against the Employees, or overturn the decision completely.

Minken Employment Lawyers is your source for expert advice and advocacy on today’s employment law issues.

See also, $20 million award upheld by appeal court, published in HR Reporter and $19.6 million award against employees upheld, published in Canadian Employment Law Today, and “Quitting your job might be tougher than you think” by Matthew McClearn in Canadian Business.

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