The Ontario Superior Court of Justice has upheld ICICI Bank of Canada’s decision to terminate the employment an assistant vice-president for cause after he shared confidential information with two competitors — BMO and RBC — for his own potential gain.
The court ruled that the former executive, A.A., had breached his duties of loyalty and good faith to the Bank by sharing the confidential information and planning to establish competing businesses while still employed.
“Employees may look for other jobs. They may hatch future plans before they leave their current employment,” wrote Justice Brownstone in the ruling.
“However, he 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.”
Employment history and role
A.A. had been with ICICI Bank of Canada or its parent company, ICIC Bank Limited, for 15 years. At the time of his termination in October 2020, he was 50 years old and was responsible for two key products in the Bank’s student direct stream: a GIC product for foreign students and the Unifee program for processing student tuition fees.
He had several direct reports in both Canada and India and was considered a knowledgeable and senior employee in this area of the Bank’s business.
His base annual salary was $120,000.
Investigation and misconduct
The case against A.A. began when the Bank’s data leakage prevention program flagged a large number of emails sent from his Bank email address to his home email address, some containing sensitive information such as social insurance numbers. This triggered a formal investigation which revealed that he had engaged in activities contrary to Bank policies.
The court found that A.A. had shared a proprietary Bank document with the Bank of Montreal (BMO) during discussions about a potential GIC business in India. He admitted to sending the document but characterized it as a template without significant proprietary information.
Justice Brownstone disagreed, stating, “The document was a lengthy and detailed document intended to establish and define legal obligations between the Bank and its consultants.”
Additionally, A.A. had incorporated a company called BrainTree with two of his subordinates, intending to compete with the Bank. The incorporation documents explicitly detailed plans to provide consultancy services to financial institutions, overlapping significantly with his duties at ICICI Bank. The court found that A.A.’s actions constituted a breach of his duty of good faith.
Other allegations and findings
The court also examined A.A.’s interactions with K.G., an employee of CIBC, a competitor. A.A. a had shared information about the Bank’s activities in the Unifee space with the CIBC employee. Although A.A. argued that this was common practice among his superiors, Justice Brownstone found that his meetings with K.G. were intended to advance their own plans, rather than benefit the Bank.
Moreover, A.A. pursued an opportunity with the Royal Bank of Canada (RBC), preparing and presenting a proposal while still employed by ICICI Bank. The court found that A.A. had shared confidential information about the Bank’s operations with RBC, intending to secure a position there.
Conduct during investigation
The court also scrutinized A.A.’s conduct during the Bank’s investigation. In a pivotal interview, he provided false explanations for his actions and withheld information about his involvement with BMO and RBC.
Justice Brownstone noted, “I find that (A.A.) was untruthful in the interview and did not provide necessary corrections in his follow-up letter.”
In his ruling, Justice Brownstone concluded that the cumulative misconduct justified his termination for cause. “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 judgment stated.
The court dismissed A.A.’s claims for wrongful dismissal, moral damages, and entitlements to bonuses and stock options. The ruling highlighted the importance of employee loyalty and the severe consequences of breaching fiduciary duties in the banking sector.
Had the court ruled A.A. had been wrongfully dismissed, it said he would have been entitled to 18 months’ notice, or $180,000. It also would have awarded him $70,000 in bonuses for a total award of $250,000.
For more information, see Arora v. ICICI Bank of Canada, 2024 ONSC 4115 (CanLII).
