Ont CA articulates detriment requirement for a breach of confidence claim

On December 24th, the Court of Appeal for Ontario affirmed the dismissal of a breach of confidence claim because the plaintiff did not make out a “detriment.” Despite its affirmation, the Court held that the trial judge erroneously said that a breach of confidence plaintiff must prove “financial loss.” It explained, “The concept of detriment is not tied to only financial loss, but is afforded a broad definition, including emotional or psychological distress, loss of bargaining advantage, and loss of potential profits.”

CTT Pharmaceutical Holdings, Inc. v. Rapid Dose Therapeutics Inc., 2019 ONCA 1018 (CanLII).

FCA articulates standard for a counsel’s eyes only order

On October 22nd, the Federal Court of Appeal affirmed a counsel’s eyes only order, affirming that such orders are available in Federal Court (despite the impact on the solicitor-client relationship) when there is a “real and substantial risk that is grounded in the evidence.” It based its affirmation on the following analysis of the facts:

The judge noted that Mr. O’Hara was the sole employee of the appellant and the driving mind behind its product development and business decisions. The judge had a well-founded concern that it would be difficult, if not altogether artificial, to expect Mr. O’Hara to completely divorce his mind from that information. Given the small and highly competitive market in which the parties both operate, this would have obvious and significant consequences for the respondents.

Arkipelago Architecture Inc. v. Enghouse Systems Limited, 2018 FCA 192 (CanLII).

NSCA grants protective order, clarifies public interest test

Yesterday the Nova Scotia Court of Appeal granted an order prohibiting the public disclosure of confidential business information belonging to the defendants in an action. It held that the motions judge erred by ruling out the order because the moving parties had a commercial interest in keeping the the relevant information secret. A concurrent public interest, according to the Court, will suffice:

That D+H and Resolve have a specific private interest does not exclude the existence of a concurrent public interest. The two are not mutually exclusive. In Sierra Club, Justice Iacobucci said (para 55) “the interest in question cannot merely be specific to the party requesting the order; the interest must be one which can be expressed in terms of a public interest in confidentiality” [emphasis added]. The question is whether D+H/Resolve’s clear private interest also can be expressed in terms of a public interest in confidentiality.

Here, the Court recognized the public interest in the integrity of a government tendering process and, after weighing competing interests as called for by the Sierra Club case, granted the order.

Resolve Business Outsourcing Income Fund v. Canadian Financial Wellness Group Inc., 2014 NSCA 98 (CanLII).

Arbitrator dismisses complaint that union misused employer’s confidential information

On June 9, Arbitrator Marcotte dismissed an employer grievance that alleged a breach of confidence by its union.

In preparing for a discipline grievance that related to service provided to a client of the employer, a union business agent contacted the client for information. The employer grieved, claiming both a violation of the collective agreement and PIPEDA. The collective agreement did not contain an express confidentiality clause. The employer relied on a number of other collective agreement provisions to support an “implied right” and ground arbitral jurisdiction, including a purpose clause that called for “orderly and harmonious relations.”

Arbitrator Marcotte held that the employer was not alleging the breach of a right granted by the collective agreement. He also held that PIPEDA does not apply.

Recall Canada and Teamsters, Local 938 (9 June 2014, Marcotte).

Government limits use of external drives, to avoid data breaches

Here is a link to an interesting Postmedia article on how HRSDC is moving to limit use by employees of portable data devices, following several incidents in which external drives containing Canadians’ personal information were lost or misplaced. There are many compelling reasons for employers to control how and when employees can remove data from the workplace, such as preventing data breaches, minimizing wrongful competition by employees or former employees, and avoiding claims for breach of privacy.