$19.6 million award against employees upheld

Employees may owe more notice if they're difficult to replace: Court
By Ronald Minken
|Canadian Employment Law Today|Last Updated: 04/18/2012

An award ordering former employees of an Ontario company to pay their former employer almost $20 million for failing to provide reasonable notice of resignation and starting up a competing business has been upheld by the province’s Court of Appeal. On March 1, 2012, the appeal court upheld the Ontario Superior Court of Justice’s decision that four employees were to provide 10 months’ notice of their resignation.

Four employees of GasTOPS, a supplier of control and condition assessment systems for industrial machinery based in Ottawa, resigned from their positions. Each employee provided two weeks’ notice of the decision to leave. When two of these employees provided the employer with their two weeks’ notice, GasTOPS told them to leave the workplace immediately. Following their resignations, these two employees set up a competing business and shortly thereafter solicited 12 of their former co-workers, who subsequently resigned from their positions with GasTOPS to join the competing company.

GasTOPS commenced an action against the four employees, claiming they were in breach of their fiduciary duties for misappropriation of confidential information, trade secrets and corporate opportunities. Additionally, and most noteworthy, the company claimed the four employees failed to give reasonable notice of their intention to resign.