As we regularly mention on the DMC LLP Blog, minimum wage in Ontario was increased to $11.60 per hour on October 1.
About once a month, a dentist will call our office and say that their long-time Dental Hygienist is going to resign in one week and the dentist is left scrambling. Other times, an employee will tell their employer that they “want a severance package” from their employer.
What is an employer to do?
Filed under Blog, Staff · Tagged with 150000 damages, 56000 damages, carroll v purcee, consbec v walker, constructive dismissal, contract, damages, dental assistant, human rights, look to the contract, notice of resignation, one-way street, prove your damages, reasonable notice, request severance, resign, resignation, resignation is not always a resignation, severance, staff, team, two week notice, two-way street, wrongful dismissal damages
So once in a while, we get a case where the court is asked to decide on whether a non-solicitation clause is valid and enforceable. And we dental lawyers need to be on top of these cases because a lot of what we draft includes non-compete and non-solicitation clauses (purchase and sale agreements, associate agreement, staff contracts, etc.).
So in July of this year, the Ontario Superior Court of Justice released its decision in the case of MD PHYSICIAN SERVICES INC. et al. v. DUANE WISNIEWSKI et al. , ONSC 2772. The facts of that case are as follows: MD Management Limited and a bunch of other companies owned by it (“MDM“) offered products and services primarily to Canadian physicians. We have 2 individuals, Duane Wisniewski and Joy Sleeth, who were employees of MDM until they left in 2013 to join a competitor firm, RBC Dominion Securities. MDM alleged that these individuals breached the non-solicitation terms of their employment contracts.
Now, the individuals claimed that those terms were unenforceable because they were too vague, too unreasonable, and there was a lack of consideration (required to make a bargain) that was given to these individuals in exchange for including the non-solicit clauses. Alternatively, these individuals claimed that they never breached the non-solicit because it was reasonable for them to notify clients of their new employment and that it was contrary to public policy to enforce these types of clauses anyways (so clients can have a more fully informed decision about the future direction of their investments).
The Ontario Superior Court of Justice didn’t buy it. First off, Joy Sleeth had signed / acknowledged non-solicitation clauses as part of her employment with MDM over many years and promotions. For his part, Duane Wisniewski had done the same. So the court ruled out that these individuals didn’t know what they were signing and sufficient consideration (namely continued employment) had been given.
With respect to the use of non-solicit, the Court stated the following:
Then the Court moved on to the issue of whether the specific non-solicit clause was enforceable. Did MDM have a proprietary interest entitled to protection? Yes. Because the individuals are paid based on a percentage of fees generated by that business, with no base salary. The book of business hence became a capital asset for them. But the client lists were provided to the individuals and created based on the efforts of MDM. MDM should have its list protected because it has a genuine interest in ensuring that it is not used simply as an opportunity for financial planners to make contact with physician investors within the relatively protected environment of the firm and then attempt to utilize those contacts to take customers away from it.
Was the restrictive covenant reasonable in terms of the public interest? Yes. It was only for a 2 year time limit after the relationship ended. It wasn’t a drastic non-compete clause. And there were lots of other Ontario cases that enforced a 2 year non-solicit: Syntax Systems Ltd. v. Mid Range Computer Group Inc.  O.J. No. 3684 (Ont. S.C.J.), Smilecorp Inc. v. Pesin  O.J. No. 5734 (Ont. S.C.J.). Based on this, the non-solicit was neither ambiguous nor unreasonable.
Was the restrictive covenant ambiguous with respect to length of time, geographic scope or scope of proscribed activities? No. The individuals were limited in who they could contact based on the terms of the agreement and the Oxford definition of “solicit”. But they could still, for example, freely solicit clients of MDM whom they had not serviced and anyone else, including physicians, who had never been a client of MDM whom they had served as an investment advisor or had encouraged to become an investor with MDM.
Now, importantly, the geographic restriction which was included in the non-solicit agreement appeared to be unhelpful: the non-solicit said that the individuals were not to solicit “within the geographic area within which s/he provided services to the employer”. Well, this is pretty vague and without precision. So would the court throw out the whole non-solicitation clause on this basis? NO. Instead the court held that the geographic description neither adds to nor detracts from the non-solicitation provision. The reason being that the individuals could have serviced or solicited clients of MDM from wherever they were (financial advice can and is provided over both long and short distances). The geographic restriction was so trivial and not part of the main purports of the restrictive covenant that it was simply severed and did not form part of the Court’s assessment as to whether the non-solicitation agreement is enforceable!
For these reasons, the Court found that the individuals had breached the non-solicitation clauses and RBC Dominion Securities was vicariously liable because it instructed them to contact former clients and coached them on how to do it. Costs were to be decided at a later point.
I thought I was a coffee guy. You can read an old blog post I wrote about beans and machines over HERE. So when I was in Jamaica early this month running our dental outreach program, drinking double espressos of perhaps the world’s greatest coffee known to man, I felt like I was in paradise. In the evenings, I would enjoy a typical “Tiger Balls” drink – named after our team name and comprised of vodka + soda with 2 cherries and a slice of orange. When I came back, I was so done with both coffee and alcohol. I had no urge to drink either. I didn’t over do it while I was in Jamaica. I just felt like I didn’t need them anymore. No desire. No mojo. Nothing.
So a week went by without either. Then it became 2 weeks. Now, it’s almost 3 weeks. And here’s what I’ve noticed. Previously, I would need coffee in the morning to wake me up. I would later on need coffee to keep me alert – particularly after a full lunch. And then I would need maybe 1 more coffee in the evening time just to push me to enjoy some me + wife time after the kids went to sleep (typically 8:30 p.m.). NOW, without any coffee in my system, I wake up at 6:30 a.m., get the 4 year old ready for school, do a workout routine, and then start me day. I have the same energy level throughout the day. I don’t eat heavy. I’m really into fruits, veggies, hummus, salad, and lean meats like chicken. I’m also drinking a lot of coconut water (based on the recommendation of another dentist). And then I start to get really tired around 10:00 p.m. And that’s it. No ups and downs. No grogginess. No nothing. It’s a strange feeling.
Also, without any wine or beer in my system, my wife has noticed that I’ve lost a few pounds. So I’m feeling pretty darn good these days. I’m drinking a hell of a lot of water (not sure if it’s because it’s hot outside or because I changed my diet or what). But I’ve lost about 10 lbs since coming back. My teeth are noticeably whiter – due to not drinking anything that stains them, like coffee or red wine. And I feel like I DON’T NEED to drink coffee or alcohol. If I’m in a social setting, sure… but otherwise… meh?!?
Am I giving these things up for good? No. I’m just taking a break.
Now my wife, who knows me pretty darn well, says: you know when we go away, you’re going to be on the hunt for good french red wine (like when we travel to St. Martin, a french collectivity) and it’s going to put the pounds on and stain your teeth! To which I respond: “Yes, but I planned ahead for that: I’m going to eat nothing but french bread and cheese and drink wine, so I will forgo everything else! And when I come back, I have an appointment to see my hygienist who will spend a good hour removing all the stains from the wine!”
Anyways, you might want to try giving up coffee or alcohol or even smoking and see for yourself how much better off your body feels when you do. It’s not a goodbye. It’s just a “I’ll see you again… perhaps later in Jamaica!”.
David Mayzel is your legal risk manager. He is a trained courtroom lawyer and has spent many years resolving disputes both in and out of court. He knows how to prepare documents and execute transactions in a way that avoids or mitigates legal risks. He can be reached at 416.528.5280. or firstname.lastname@example.org.
Michael Carabash is your business law adviser. He is an entrepreneur at heart who helps you see the big legal picture. He drafts clear and effective agreements that protect your rights while promoting your interests. He can be reached at 647.680.9530. or email@example.com.
Ljubica Durlovska is your transition lawyer. She helps you with staff and associates, maintaining your corporation, and other business matters. She can be reached at 416.443.9280, extension 206 or firstname.lastname@example.org.
Jonathan Borrelli is your employment lawyer. He helps you with staff and associates matters, including hirings, terminations, switching staff to written contracts and resolving disputes. He can be reached at 416.443.9280, extension 204 or email@example.com.
Benjamin Kong is an experienced business law clerk. He assists David and Michael with corporate matters and purchase / sale transactions. He can be reached at 416.443.9280, extension 207 or firstname.lastname@example.org.
Julie Whitehouse is an experienced business law clerk. She assists David and Michael with corporate matters and purchase / sale transactions. She can be reached at 416.443.9280, extension 203 or email@example.com.
David, Michael, Ljubica, Jonathan, Ben and Julie are a truly dynamic team. Their diverse knowledge, skills, and experiences will help you get the best deal possible while promoting your interests and protecting your rights. You can read dentist testimonials here.