On July 14th, the Ontario Superior Court of Justice – Divisional Court made some significant comments in affirming an order to set aside an Anton Piller order.

The order was initially granted in 2006 in support of a departing employee claim that included allegations of fraud and breach of confidence. Hambly J. set it aside based on a failure to demonstrate a threat of very serious damage and failure to to make full, frank and fair disclosure. He later imposed a costs award on the plaintiff in respect of the Anton Piller proceedings that totaled over $550,000. This motivated the plaintiff’s appeal, which was made on leave and over an objection that the matter was moot.

The Divisional Court, in reasons written by Wilton-Siegel J., dismissed the appeal. Its key legal findings are as follows:

• The second factor outlined in Celanese requires a plaintiff to demonstrate a strong prima facie case for “very serious damage.” This is not necessarily satisfied by proof of a substantial risk of an inability to prosecute due to the destruction of evidence. Wilton-Siegel J. suggests that a court should also examine whether very serious damage will flow from the misconduct itself.
• Since an Anton Piller order is discretionary, a plaintiff is not entitled to an order if it meets the four criteria outlined in Celanese. A court should consider whether an order is necessary, including “whether the evidence is available to the plaintiff by other means that are not as intrusive as an Anton Piller order.”
• Evidence of belief or suspicion of wrongdoing and damage must be based on a solid foundation of “documentary or other evidence.” If a plaintiff  adduces evidence of belief or suspicion without “very strong reasons to believe,” it must disclose its weakness.

The Court’s reasons flesh out the requirements for an Anton Piller order and invite a conservative application of discretion in a manner that should give plaintiffs considering this remedy reason to pause for additional thought. The reasons make very clear that surviving a motion to set aside is no small feat. Moreover, the Court’s treatment of the second – “very serious damage” – factor in Celanese addresses what Wilton-Siegel J. characterizes as an ambiguity in the case law.

Factor Gas v. Jean, 2010 ONSC 2454 (CanLII).

On June 18th, Arbitrator Joseph Rose dismissed a preliminary objection that sought the exclusion of video surveillance evidence based on an allegation of insufficient grounds to warrant its use. He adopted the views expressed by Arbitrator Bendel and Arbitrator Raymomd and held (in perhaps slightly more qualified terms than the aforementioned) that relevant evidence is admissible despite any alleged privacy breach.

Thames Emergency Medical Services v. CAW, Local 302 (Wilson Grievance), [2010] O.L.A.A. No. 315 (Rose).

The Ontario Labour Relations Board issued a decision on June 6th in which it held that a faculty union, as a certified bargaining agent, has a right of routine access to harassment investigation decisions in which either the complainant or respondent is a member. Vice-Chair Patrick Kenny held that the provision of this information was necessary to the union’s representational role:

Without providing an exhaustive list of the circumstances in which the trade union bargaining agent will reasonably require confidential information, the facts in this case give one circumstance in which the trade union is entitled to receive the information. It has a responsibility, with the University, to provide a harassment-free and to ensure a discrimination-free working environment. It is involved in responding to employees in its bargaining unit who have been subjected to harassment or discrimination such as would be described in the Notices of Decision. This is why it has a legal interest in receiving, and is entitled to, copies of the Notices of Decision.

I am persuaded, therefore, that LUFA’s request for copies of each Notice of Decision, is clearly grounded in section 70 of the Act. LUFA needs that information, which is disclosed as of right to the complainant, the respondent and the individual responsible for taking corrective action, for the purpose of deciding whether or not it ought to file grievances to protect the interests of individual bargaining unit members, the bargaining unit as a whole, and/or the trade union as an institutional party. Indeed, LUFA has filed grievances in the past with respect to issues arising from the results of investigations and conclusions reached in Notices of Decision under the Policy. Apart from any application of the Privacy Act, LUFA is entitled under section 70 to a copy of each Notice of Decision.

Vice-Chair Kenny held that individual consent was not necessary, that that records of harassment investigations involving faculty are excluded from the Freedom of Information and Protection of Privacy Act as employment-related and that, in any event, their disclosure to the union would be authorized as “required by law.”

Laurentian University Faculty Association v. Laurentian University, 2010 CanLII 32256 (ON L.R.B.).

The Federal Court issued a very significant judgement on the scope of PIPEDA application today. Mainville J. held that PIPEDA does not apply to a collection, use or disclosure of personal information merely because it is collected, used or disclosed by an agent on behalf of a principal with whom it is in a commercial relationship.

PIPEDA applies to personal information that is “collected, used or disclosed in the course of commercial activity.” Since PIPEDA came into force in the provinces, people have questioned whether it applies merely because personal information is processed by an agent that is in a commercial relationship with a principal that is engaged in provincially-regulated activity. For example, provincially-regulated employers retain a range of agents who collect, use and disclose employee personal information on their behalves for the purpose of employment administration – e.g. private investigators, payroll processing agents, benefit administrators and others.

In the matter addressed in today’s decision, State Farm retained a private investigator on behalf of an insured person who was ultimately sued by a motor vehicle accident plaintiff. The private investigator conducted video surveillance on the plaintiff, and the plaintiff sought access to the surveillance footage under PIPEDA.  Mainville J. held that PIPEDA did not apply. He said:

I conclude that, on a proper construction of PIPEDA, if the primary activity or conduct at hand, in this case the collection of evidence on a plaintiff by an individual defendant in order to mount a defence to a civil tort action, is not a commercial activity contemplated by PIPEDA, then that activity or conduct remains exempt from PIPEDA even if third parties are retained by an individual to carry out that activity or conduct on his or her behalf. The primary characterization of the activity or conduct under PIPEDA is thus the dominant factor in assessing the commercial character of that activity or conduct under PIPEDA, not the incidental relationship between the one who seeks to carry out the activity or conduct and third parties. In this case, the insurer-insured and attorney-client relationships are simply incidental to the primary non-commercial activity or conduct at issue, namely the collection of evidence by the defendant Ms. Vetter in order to defend herself in the civil tort action brought against her by Mr. Gaudet.

This is a broad and principled finding on the scope of PIPEDA application. It is not limited to any particular kind of agency relationship and will no doubt cause lawyers, insurers and provincially-regulated employers to be pleased.

Note that State Farm backed its successful interpretation ground with a ground that rested on a very broad challenge to PIPEDA’s constitutional validity. Mainville J. did not decide on this second ground. His decision also contains some findings on points of judicial review procedure and administrative law that I have not summarized.

[Hat tip to David Fraser, and a big congrats!]

State Farm v. Privacy Commissioner of Canada, [2010] FC 736.

On June 23rd, Mosely J. of the Federal Court dismissed a PIPEDA application because the applicant failed to establish a need for a compliance order (with or without notice to the public) and failed to prove his damages. In doing so, Mosely J. made the following conservative statement about the PIPEDA’s remedial provision:

Pursuant to section 16 of PIPEDA, an award of damages is not be made lightly. Such an award should only be made in the most egregious situations. I do not find the instant case to be an egregious situation.

The OPC issued a report in May 2009 in which it concluded that the respondent – a fitness club – breached the consent rule in PIPEDA by disclosing information about the applicant’s membership usage to his employer as part a corporate membership program. It recommended a change in practice, and the respondent complied.

Mosely J. held that the applicant had established a breach of the consent rule but had not established justification for a remedy. He rejected the applicant’s argument that he suffered employment-related consequences because of the breach for wont of evidence. His reasoning suggests that individuals who apply for a PIPEDA remedy must prove damages, and based on the statement quoted above, something significantly more.

Randall v. Nubodys Fitness Centres, 2010 FC 681 (CanLII).

On May 14th, Arbitrator Wayne Moore endorsed the general reasonableness of a City of Vancouver policy that requires current employees in designated positions to submit police record checks every five years but also held that it ought not apply based on fire suppression duties.

Arbitrator Moore assessed whether the policy was reasonable light of the necessity standard in section 26(c) of the British Columbia FIPPA. He started by rejecting the Union’s argument that the City needed to demonstrate an “existing problem” to justify checks on current employees:

The Union argues that in order to implement the Policy, the Employer must show evidence of an existing problem in the workplace. I find that it is not inherently unreasonable to enact a policy in anticipation of a problem so that the organization can be in a position to identify the problem and to address it. To the extent that the Union argues that actual evidence of a problem in the workplace is a pre-requsite for the establishment of a reasonable policy, I disagree. In my view, the Employer is entitled to act proactively, so long as it does so reasonably. That said, the absence of evidence of a problem can impact on both the reasonableness of a policy and the reasonableness of its application.

Then, Arbitrator Moore held that the City ought to narrow its criteria for designation to conform with the reasonableness requirement, in essence requiring a relatively strong correspondence between position duties and risk. In the result, he held that it was reasonable to designate members of the City’s fire unit as subject to the police check requirement based one or more of the following criteria:

• they have ongoing or significant unsupervised access to vulnerable people in the ordinary course of employment (where “unsupervised” means unsupervised by management or other employees)
• they are responsible for the security of people and/or material assets in “some significant way”
• they exercise significant discretion and have independent power to make decisions, such that they may be susceptible to corruption

Based on these narrowed criteria, Arbitrator Moore held that the City had improperly designated a number of positions. He held that fire suppression and the provision of emergency medical services involves insignificant contact with vulnerable persons (as distinct from the role of a paramedic who responds to a fire call) and involves an insignificant responsibility for the security of people and material assets (as distinct from the role of a site security guard). By this finding, he held that the policy ought not apply to firefighters and other positions that the City designated on the basis of fire suppression duties. Conversely, he held that the City properly designated a number of positions based on an assigned responsibility for fire safety enforcement.

Arbitrator Moore also held that they City must compensate employees for time spent, including travel time, at overtime rates and must reimburse employees for the expenses incurred in obtaining their records.

Vancouver (City) v. Vancouver Firefighters’ Union, Local 18 (Police Records Checks Grievance), [2010] B.C.C.A.A.A. No. 81 (Moore).

This is a short note on last Thursday’s Supreme Court of the United States decision in Doe v. Reed.

An 8-1 majority held that, as a general matter, the First Amendment does not grant signatories to state referendum petitions a right to remain anonymous that prevails over state open records laws. In the five separate concurring opinions the justices expressed a range of views on how the First Amendment ought to apply to a specific claim to anonymity, from the privacy-protective opinion of Justice Alito to the very pro-openness opinion of Justice Scalia. Justice Thomas dissented on his own, arguing that compelled disclosure of signed referendum and initiative petitions would impose a significant chilling effect on participation and that procedural integrity can generally be assured through less restrictive means than exposing petitioners’ identities.

For full commentary, see the ScotusWiki entry here.

[Qualification. I practice law in Ontario, Canada. This is a comment and not a legal opinion and I am not holding myself out as qualified to practice in matters related to American law.]