Canadian Employment Law Today

Canadian Employment Law Today | 7 Canadian HR Reporter, a Thomson Reuters business 2016 Cases and Trends/More Cases himself, that he had the self-confidence that he would do the job properly and would pass the probationary period. at was the gamble he was prepared to take." e court ordered Select to pay Nagribianko damages in lieu of notice equal to four months' salary and benefits. Select appealed to the Ontario Superior Court of Justice (Divisional Court). e appeal court noted that "the nature of the employment relationship during pro- bation is tentative" and the employer "must extend to the probationary employee a fair opportunity to demonstrate suitability for permanent employment." However, the em- ployer can dismiss a probationary employee without notice or give reasons, as long as it acts in good faith. In addition, if an employer dismisses a probationary employee, it is on its own judgment and discretion that can't be questioned, said the appeal court. e appeal court found there was no evi- dence to indicate Select acted in bad faith and call into question the company's discre- tion and judgment. It didn't matter if Nagrib- ianko didn't receive a copy of the employee handbook as the employment contract clearly stipulated he had a six-month proba- tionary period and Nagribianko understood what that meant, said the court. "A reasonable person in the same circum- stances as (Nagribianko) would have under- stood the term 'probation' to mean a period of tentative employment during which Se- lect would determine whether (he) would be a suitable employee and would decide whether or not to make him a regular/non- probationary employee," said the appeal court. "(Nagribianko) may have believed that the employer would find him to be a suitable employee, but a reasonable person in those circumstances would also have un- derstood that that might not happen." e appeal court also found that Select could not have induced Nagribianko to come work for the company, as the existence of a probationary period makes it clear that permanent employment isn't guaranteed and shouldn't be expected. "Probationary employment, on its face and by its nature, is inconsistent with any in- ducement or promise of long-term employ- ment," said the appeal court. e appeal court found the trial court erred in law by failing to enforce the "clear terms of the employment contract that (Nagribianko) had signed that made refer- ence to a probationary period of six months." It overturned the decision and upheld Nagribianko's dismissal. See Nagribianko v. Select Wine Merchants Ltd., 2016 Carswel- lOnt 891 (Ont. Div. Ct.). Permanent employment not guaranteed « from PROBATIONARY on page 1 ful in obtaining a court order on April 9 for the Reias to stop soliciting CEC clients. Former employees' business focused mainly on employer's customers Jeffrey Reia argued he didn't solicit CEC customers until after his employment with the company was terminated, but rather they called him asking for bids, to which he responded. Jason initially claimed he took a few months off after leaving CEC, though he later said he called his former CEC custom- ers soon after he left and asked them to do business with JC Options but stopped this practice after the court order. However, they both acknowledged after the April 9 court order CEC clients continued to contact them and their company only submitted bids in response to their calls. During the first six months after Jason left CEC, more than 95 per cent of JC Options' business was with former customers of CEC which they had contacted or been contacted by. e court found that given the brothers' admitted intention to go into business to- gether, it was unlikely they didn't have any discussions about it before they incorporat- ed JC Options after Jeffrey was dismissed by CEC. erefore, they worked together sub- mitting bids for their own company while Jason was still employed with CEC, and they didn't need any customer lists from CEC because they already knew who the custom- ers were. It didn't matter whether they con- tacted the customers or the customers con- tacted them, the brothers were well aware that they were customers with whom CEC had an ongoing business relationship, said the court. e court found Jason's non-competition/ non-solicitation agreement wasn't enforce- able, as it was signed several months after he started working for CEC and he received no consideration for what amounted to a change in his employment contract. Unlike Jason's agreement, the court found Jeffrey received consideration for his, as he signed it as a term of employment when he started in April 2000. However, the non- competition provision was unreasonable and unenforceable since it was unreasonable to demand he not use his skills for six months following his termination of employment. He didn't take any confidential informa- tion with him, only the skills he developed with CEC, said the court. In addition, the requirement that he not act "intentionally in any manner that is detrimental to CEC's relations with its customers" was vague and ambiguous, said the court. However, the court found Jeffrey's non- solicitation clause was enforceable, since it merely prohibited him from soliciting CEC customers for six months — a rea- sonable limitation, according to the court. is clause was in effect until the April 9 court order, which took over at that point. Top sales representative owed fiduciary duty e court also found Jason owed a fiduciary duty to CEC from when his brother was fired on Feb. 15, 2009, until he left on March 27 of that year, as he was still an employee. As a top sales representative, he was a key employee of CEC and several customers dealt only with him. He had considerable autonomy on his sales deals and deal with a large num- ber of CEC customers over his 14 years with CEC. As a result, he also owed a fiduciary duty to CEC for the two weeks between his resignation and when the court order took over, said the court. e court determined Jason and Jeffrey Reia both violated their fiduciary duties — and Jeffrey his non-solicitation agreement — after Jeffrey was dismissed by CEC. It also found they assisted each other to breach their fiduciary duties. As for the period following the court or- der, the court determined JC Options only submitted bids in response to calls from cli- ents and no soliciting was done by the two brothers. Jason and Jeffrey Reia — and their compa- ny, JC Options — were ordered to pay CEC damages for lost profits that went towards JC Options' profits between Jeffrey's dismissal and the court order as a result of their solici- tation of CEC customers. is amounted to damages worth $132,581. For more information see: • Computer Enhancement Corp. v. J.C. Op- tions, 2016 CarswellOnt 952 (Ont. S.C.J.). One violated fiduciary duty, the other his non-soliciation pact « from SALES REPS on page 3 It didn't matter who contacted whom,the brothers were aware that they were customers with whom CEC had an ongoing business relationship.

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