Fiduciary employees – Can you poach?

Certain key employees with important knowledge have limits on what they can do after resigning
By Ronald Minken
|Canadian Employment Law Today|Last Updated: 11/22/2017

Resigning from a job does not completely sever an employee’s responsibilities towards her former employer. There can be remaining requirements that past employees need to respect, such as not disclosing any confidential information gained while working for that employer. Further, there is a type of employee that has even more limitations on its actions after resigning — a fiduciary employee. In the recent Ontario Superior Court of Justice decision Cosolo v. Geo. A. Kelson Limited, the court outlined the responsibilities of a departing fiduciary employee when there isn’t a written employment agreement involved.

Louie Cosolo worked for the engineering firm Geo. A. Kelson Limited for approximately 10 years. After several promotions, he attained the position of Vice President, Supply Chain & Procurement in 2014 — making him one of the five senior executives of Kelson. On Oct. 30, 2015, Cosolo resigned from his employment with Kelson in order to become the CEO of ENGIE, another engineering firm. There was no written employment agreement between Cosolo and Kelson.

During his employment, Cosolo acquired and sold 43,000 Class E common shares of Kelson for $891,820, for which he was to receive 10 payments of $89,182, plus interest on the outstanding balance. He received the first payment while he was still working for Kelson abut after he resigned, the payments stopped.