An Ontario court has dismissed an employer’s lawsuit against two of its former employees, and it also tossed out a counterclaim by those workers.
Northwest Protection Services Ltd., a company that provides security at various settings including live events and retail outlets, filed a claim against former employees RW and RD. The company accused the duo of breaching fiduciary duties and misusing confidential information after they ceased their association with Northwest around March 2020.
The heart of Northwest’s allegations centred on the pair supposedly leveraging sensitive company data to aid competitors and themselves, particularly in bidding, pricing, and proposal requests contexts. According to the company, this misconduct directly affected its operational success and client relationships.
However, the court’s findings painted a different picture. Justice Brownstone of the Ontario Superior Court of Justice said RW and RD “were not fiduciaries of Northwest… they had some role in planning specific security requirements for events… but were not part of the management team… They did not have access to the firm’s software that housed its client lists” thus challenging the core of Northwest’s accusations regarding their alleged fiduciary role and access to confidential data.
Furthermore, the judgment highlighted inconsistencies and shortcomings in the evidence provided by Northwest. The company’s chief operations officer faced criticism for his evasive responses during cross-examination, with the court finding him “more interested in arguing than in answering questions properly posed to him.”
On the counter side, RW and P7 (RW’s corporation) countered by accusing Northwest of wrongful actions including an involuntary layoff and interference with their economic relations, specifically with the popular Fan Expo event. The court, however, also dismissed these counterclaims, indicating insufficient evidence of any wrongful conduct or damages incurred by RW and P7.
Justice Brownstone’s decision underscored a lack of substantiation for the claims and counterclaims, pointing out, “Northwest filed no expert report and no damages brief quantifying its alleged damages… (RW) and (RD) did not wrongfully work for Northwest’s competitors; P7 did not wrongfully compete with Northwest.”
Both the main claim and the counterclaim were dismissed, with the court encouraging both parties to reach an agreement on trial costs.
For more information, see Northwest Protection Services Ltd. v. Wellington, 2024 ONSC 1292 (CanLII).
