Legal News

E-mailed Client List Leads to Injunction

Two days before resigning abruptly from his employment, a senior trader with an agricultural commodities trading firm sent a message containing confidential customer information from the office to his personal email account. The information, including details about client preferences, contacts and notes for the promotion of future business, was covered by a confidentiality agreement that the trader had signed when he was hired. Shortly after his resignation the trader started his own business in direct competition with his former firm. The firm applied for an injunction to prevent him from soliciting its clients and using the misappropriated client information.

The court granted the injunction, finding that the firm’s claims of breach of fiduciary duty, wrongful use of confidential information and failure to give reasonable notice raised serious issues to be tried. The court concluded that the firm would face irreparable harm if an injunction was not granted because it would suffer a loss of market share and good will. In order to reasonably limit the terms of the injunction, the court limited the prohibition against the trader doing business with his former clients to six months, and limited his non-solicitation obligation to twelve months. The court also granted the trader leave to apply to exempt certain clients from the injunction.

This case demonstrates the potential value of investigating an ex-employee’s email and other communications records if an employer becomes concerned about unlawful competition.

C.B. Constantini Ltd. v. Slozka et al. [2006] B.C.J. No. 1798