Here at DMC, we keep a close eye on whenever courts in Canada have something to say about restrictive covenants and non-solicits (just like Michael Carabash did not too long ago).
I just read a recent case (from Quebec) that put a nice big check mark on the side of Principals and Employers and protecting their Non-Solicitation (non-solicit) clauses and their businesses.
Filed under Blog, Non Compete | Non Solicit, Staff · Tagged with are non solicitation clauses legal, associate agreements, damages, dental lawyers, dental office, DMC LLP, jointly and severally liable, Jonathan Borrelli, liquidated damages, non solicit, non solicitation, non solicitation agreement, penalize employee, quebec not ontario, restrictive covenants
As we mentioned earlier this year, Northern Ontario Dentists should make sure they are in full compliance with the Employment Standards Act. This includes making sure the ESA poster is up, abiding by the rules around hours of work, overtime pay, holiday pay agreements, public holidays, paid vacation, time between shifts, breaks, leaves of absences, and employee lists to name a few.
From October 2017 to December 2017, the Ministry of Labour will be auditing Dentists for employment standards compliance for the Northern Region (including North Bay, Sudbury, Timmins, Thunder Bay and Sault Ste. Marie).
If you are a dentist in this area and you are unsure about any aspect of ESA compliance, DMC LLP offers Employment Standards Act audits to make sure your practice can pass a ministry inspection easily. Give us a call and let us know if you have any questions.
Filed under Blog, Dental Hygienists, Staff · Tagged with audit, breaks, dental law, dental lawyers, DMC LLP, employee lists, employees, employment law, Employment Standards Act, ESA, ESA poster, holiday pay agreements, hours of work, Jonathan Borrelli, leaves of absences, North Bay, northern ontario, overtime pay, paid vacation, public holidays, Sault Ste. Marie, Sudbury, Thunder Bay, time between shifts, Timmins
Will a Corporation Shield a Dentist from Personal Liability?
If you are have a professional corporation, are you PERSONALLY shielded from negligence claims based on failing to adhere to infection prevention and control protocols and standards? NOPE. Why not? Because Section 3.4(1) of Ontario’s Business Corporations Act says that there no limits on the professional liability of a shareholder of a professional corporation (i.e. the principal dentist) with respect to the acts of that shareholder or the acts of employees or agents of that corporation. Indeed, section 3.4(3) says that the professional liability of a dentist is not affected by the fact that they’re practicing through a professional corporation.
Will a Dentist be Liable for the Actions / Omissions of their Staff?
Vicarious liability is a common law (judge made law) doctrine that says that an employer is liable for the negligent acts and omissions of their employee. Courts have held that employers are vicariously liable for both employee acts AUTHORIZED by the employer AND UNAUTHORIZED acts so connected with authorized acts that they may be regarded as modes of doing authorized acts. What matters is whether the alleged negligence involves the element of control and whether the person committing the tort was at all material times under the supervision and control of the employer. It won’t matter if the person is an employee or independent contractor for the employer / client to be found vicariously liable. Where the person is an employee, then the employer may be liable in negligence for inadequately supervising them or substandard hiring or training practices.
Furthermore, section 3.4(2) of the Business Corporations Act says that, for the purposes of professional liability, the acts of a professional corporation shall be deemed to be the acts of the shareholders, employees or agents of the corporation. On top of that, Section 3.4(4) says that a person will be jointly and severally liable with a professional corporation for all professional liability claims made against the corporation if that person was a shareholder of that corporation when the errors and omissions were made / occurred.
What About PLP?
Dentists’ Professional Liability Program will cover a member who runs into issues with infection control as it is part of the practice of dentistry. It would be considered part of each member’s $2-million protection. An example of this would be if a patient sued, alleging they caught an infection as a result of the dentist / practice failing to adhere to proper infection prevention and control protocols and standards.
PLP will even cover vicarious liability. Per their website, “Dentists and their health professions corporations are also entitled to assistance when they are sued for vicarious liability, i.e. for acts and omissions of their employees in rendering professional services on or behalf of members or their HPCs.”
So Centre City Periodontists, P.C. v. Dentstply International, Inc.  U.S. District Court, E.D. Pennsylvania is an interesting and recent case worth mentioning. In that case, Centre City Periodontists, P.C. and dentists residing in Pennsylvania and New Jersey sued Dentsply International, Inc. in a class action for breach of express warranty. They claimed alleged deficiencies in the design and labeling of various models of the Cavitron ultrasonic scaler.
The crux of the dentists’ claim was that the Cavitron isn’t safe or suitable “for its indicated uses because the internal walls of the device’s waterlines naturally accumulate biofilm, exposing patients and dental staff to potentially hazardous bacteria levels in excess of safe water standards, even when operated and maintained in a manner consisted with the Directions for Use and related materials”.
According to the dentists, this inherent defect constituted a breach of the Cavitron’s express warranty against defects in materials or workmanship. Together with Dentsply’s failure to disclose this defect, this amounted to a breach of an express warranty of safety and suitable contained in the Directions for Use and related materials.
By way of background, a Cavitron is a device used to deliver high pressure, pulsating water stream into a patient’s mouth through a hand piece at the end of a flexible tube that is connected to the device’s main body. The water stream keeps the working area cool and frees up debris during non-surgical procedures. Only certain quality of water should be used because of the potential for pathogenic microorganisms to be transmitted through the water.
The U.S. Centers for Disease Control and Prevents established guidelines in 2003 to advise health professionals to use adaptive devices or closed water systems combined with chemical flushing and other measures in consultation with manufacturers to achieve no more than 500 colony forming units per milliliter (the regulatory standard for portable water established by the U.S. Environmental Protection Agency). In other words: water flushing isn’t enough on its own. Even the American Dental Association was recommending to its members in 1996 that biolfilm formation in waterlines should be managed using a combination of strategies such as chemical treatment and independent reservoirs.
Now, because the Directions for Use and related materials HAD NOT required the installation of of a closed water system or chemical flushing AND HAD NOT warned buyers of the biofilm problem, the dentists who launched the class action purportedly believed that the Cavitrons would deliver potable water consistent with safe water standards for its indicated uses when installed on an OPEN water source and FLUSHED only with water in accordance with the Directions for Use. Over time, these dentists noticed that, when left untreated, the Cavitron’s waterlines naturally accumulated potentially hazardous levels of biofilm.
So the dentists sued Dentsply in 2010 and alleged that Dentsply had allegedly breached an express warranty, negligently designed the Cavitrons and violated New Jersey’s Consumer Fraud Act. For the class to be certified as a class action to proceed under the rules of civil procedure, there number be (1) a numerous class that joinder of all members is impracticable, (2) common questions, (3) typical claims, and (4) adequate representation. Let’s look at each of these requirements, shall we?
The plaintiff dentists were unable to prove that the class was so numerous that having them individually sue is impractical. Yes, the plaintiff dentists pointed to the number of dentists practicing in New Jersey and Pennsylvania who COULD be included in the class of dentists who bought Cavitrons and also connected them to an open water source. But the Court could not “assume”, “speculate” or defer to “common sense” with respect to how many class members existed. The plaintiff dentists must produce evidence, direct or circumstantial, specific to the products, problems, parties, and geographic areas actually covered by the proposed class definition to allow a court to make a FACTUAL finding. And there was insufficient evidence here. While the plaintiffs failed at this point and the whole case could be dismissed as a result, the Court went to to assess the other components of having a class action certified.
This is the only component of certifying a class action that the plaintiff dentists were able to establish – namely, whether Dentsply’s conduct was common as to all members of the class. The plaintiff dentists argued that the breach of warranty claims all share as a common issue that Dentsply represented in the Directions for Use that the Cavitrons were suitable for its indicated dental uses if purchasers followed Dentsply’s installation and maintenance instructions. The Court agreed that these types of questions will result in common answers that apply across the board to all members of the class.
Importantly, the common issues must be typical among the class. The claims of the class representative must be generally the same as those of the class in terms of the legal theory advanced and the factual circumstances underlying that theory. Also, the class representative must not be subject to a defence that is both inapplicable to many class members and likely to become a major focus of the litigation. Finally, the interests and incentives of the representatives must be sufficiently aligned with those of the class.
On these issues of typicality, the plaintiff dentists failed to satisfy this requirement. First, some plaintiff dentists bought their Cavitrons at a discount from an UNAUTHORIZED dealer (this could defeat that plaintiff dentist’s claim since the warranty covers only products purchased from an AUTHORIZED Dentsply dealer). Second, some plaintiff dentists acknowledged that they hadn’t necessarily read (or recall having read) all of the relevant provisions of the Cavitron’s Directions for Use; but not being aware of the content CANNOT be typical representatives of a class that was allegedly misled and damaged by Dentsply’s representations in those same Directions for Use! For these and other reasons, the Court held that the plaintiff dentists’ claims are not sufficiently typical to warrant certification of the class action.
Because some of the plaintiff dentists had specific issues that diverged the interests and the incentives between them and the class members, which meant that they could not fairly and adequately represent the class. For example, some of the plaintiff dentists had untimely claims because they bought Cavitrons too early on and could be barred from bringing claims based on the statute of limitations. And this fight to have these particular plaintiff dentists involved involved in the class action might create intra-class conflict because the plaintiffs may be incentivized to spend resources to save their less valuable claims without any obvious benefit to class members with more valuable, timely claims.
Another problem with adequacy is the fact that a plaintiff dentist and one of the their lawyers had been friends for twenty-five years and still regularly kept in touch despite living on opposite coasts. The plaintiff dentists treated that solicitor’s family members. And the plaintiff dentist replied that he available to help when approached by the solicitor about the lawsuit. All of this raised serious concerns as to the plaintiff dentist’s adequacy to represent the class.
For these and other reasons (including finding that a class action was not superior to other available methods for adjudicating this controversy), the Court refused to certify the class.
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.