The Court of Appeal for Ontario has dismissed an appeal by RBC Dominion Securities Inc. (RBCDS) and two financial advisors that sought to overturn a lower court decision that found the advisors violated the terms of their non-solicitation agreement with their previous employer.
In the appeal, RBCDS and advisors Joy Sleeth and Duane Wisniewski argued that a trial judge erred in a 2017 decision that the advisors violated the non-solicitation agreement with their previous employers, MD Management Ltd. and MD Physician Services Inc., when they moved to RBCDS in 2013.
According to the appeal court’s decision, the advisors and RBCDS argued that the trial judge applied the “wrong legal principles to the enforceability of restrictive covenants and non-solicitation clauses in an employment law context.”
The appeal court rejected their argument and upheld the lower court’s decision. “The calls made by the appellants to former clients were not — as the appellants suggest — courtesy calls,” the court stated in its decision. “They were clearly made with a view to bringing the clients to RBC. The calls were made immediately after [the advisors were] hired by RBC, they were made personally, by telephone and followed a predetermined structure. The evidence supports the trial judge’s conclusion that the calls were to solicit business.”
The court also stated, “The scope of the proscribed activities was clearly defined by the agreement. Sleeth and Wisniewski were not to solicit the business of clients or prospective clients they had serviced or solicited while employed by the respondents for a period of two years after they left MD’s employ. As well, the geographical scope was reasonable.”
The court dismissed the appeal, with $55,000 in costs payable to MD.