Case Report – Implementation of biometric timekeeping system upheld

On August 7th, Arbitrator David Murray dismissed a grievance that challenged the implementation of a biometric timekeeping system. According to Mr. Murray, when an employer proves the general superiority of a new technology, the standard for invasiveness that would justify restricting its implementation is high. He said:

The union grounded its case squarely on the claim that Kronos violated the management rights clause of the collective agreement. No evidence was brought that it did. Instead the union pointed out that the evidence of Erskine could be interpreted to justify the view that if there was anything wrong with the old ITR system (and the union said, correctly, there had been no evidence of time stealing or buddy punching) it could be rectified with a system less technologically advanced than Kronos. That line of reasoning is not only not persuasive, it is positively Luddite. If the employer believed that Kronos was state-of-the-art and met its needs why should it have to put up with second best absent any evidence that employees rights were being infringed? If the opportunity had existed who would not want to move from the Age of Sail to the Age of Flight without going through the Age of Steam first?

Arbitrator Murray was very critical of Arbitrator Timms’ IKO Industries award, in which she allowed a grievance challenging the same timekeeping system.

Re Good Humour – Breyers and United Food & Commercial Workers Union, Local 175, [2007] O.L.A.A. No. 406 (Murray) (QL).

State report on Virginia Tech released

The state panel struck by Virginia Governor Tim Kaine released its report on the April shootings yesterday. Once again, the report has some strong comments on the need for information-sharing, at one point stating, “Information privacy laws cannot help students if the law allows sharing, but agency policy or practice forbids necessary sharing.”

At this point I have only scanned the report and read the summary, but may post a comment after reading the (lengthy) report in full.

See the University’s internal “Interface” report here and the special report to the President of the United States here. I’ve posted about the incident here and written about here.

One to watch – Implied undertaking case at the SCC

A significant case on the implied undertaking rule (or deemed undertaking rule, as it may be) is being heard at the Supreme Court of Canada on November 16th.

In Doucette v. Wee Watch Day Care Systems Inc., 2006 BCCA 2662 the British Columbia Court of Appeal held that a party obtaining information in the discovery process can make a bona fide report of criminal conduct to the police without seeking court approval.

The underlying action was a negligence claim against a day care and day care worker which was filed after a child suffered a seizure while under care. The police investigation was ongoing, but the police had not yet laid charges by the time the day care worker’s examination for discovery was scheduled. The day care worker filed a motion to request an express restriction on disclosure of her transcript and the Attorney-General brought a competing motion seeking to vary the implied undertaking to allow disclosure of the discovery transcript to the police. The trial judge held that both motions were premature but declared that the A-G and the police were under an obligation not to cause the parties to violate their undertakings without the day care worker’s consent or leave of the court.

The Court of Appeal acknowledged an exception to the undertaking when disclosure is necessary to prevent serious and imminent harm and then went further to permit disclosure without court approval in non-exigent circumstances:

The conclusion reached by the chambers judge is thoughtful and practical. It does not, however, contemplate the circumstance in which neither party has an interest in or is willing to seek court ordered relief from the disclosure of information under the undertaking or otherwise. Nor does it contemplate non-exigent circumstances of disclosed criminal conduct. It is easy to imagine a situation in which criminal conduct is disclosed in the discovery process, but no one apprehends that immediate harm is likely to result. Nevertheless, if an application to court is required before a party may disclose the alleged conduct, the perpetrator of the crime may be notified of the disclosure and afforded the opportunity to destroy or hide evidence or otherwise conceal his or her involvement in the alleged crime.

In my opinion, the scope of the undertaking must be fashioned in a manner that accommodates these and other eventualities. I conclude that the implied undertaking of confidentiality rule is as stated in Hunt: a party obtaining production of documents or transcriptions of oral examination of discovery is under a general obligation, in most cases, to keep such document confidential. A party seeking to use the discovery evidence other than in the proceedings in which it is produced must obtain the permission of the disclosing party or leave of the court. However, the obligation of confidentiality does not extend to bona fide disclosure of criminal conduct. On the other hand, non-bona fide disclosure of alleged criminal conduct would attract serious civil sanctions for contempt.

The focus of the inquiry is on the use to which the evidence is to be made. A party is limited in the manner in which it can use the discovery evidence as I have indicated above. A non-party, such as the police, who obtains the discovery evidence by lawful means (such as by search warrant) is not prevented from using the evidence to further an investigation. Whether the evidence can be used in a subsequent criminal proceeding is a matter to be considered by the criminal court.

In Ontario the issue is governed by Rule 30.1.01(8) but the analysis is the same. In fact, the Court considered the limited Ontario jurisprudence on the issue and held, to the extent the Ontario jurisprudence favoured a rigorous deemed undertaking rule over the protection of the public interest in the detection and prosecution of crimes, the Ontario jurisprudence should not be followed. See in particular: Linchris Homes Ltd. (1990), 1 O.R. (3d) (G.D.), Perrin v. Beninger, 2004 CanLII 18347 (Ont. S.C.J.) and Klassen v. College of Physicians and Surgeons of Ontario, [2002] O.J. No. 4055 (S.C.J.).

This is truly one to watch.

Alex Cameron of the On the Identity Trail project recently wrote a good article on the related issue of privacy and litigation at blog-on-nymity. It’s available here.

The Hicks Post – Data breach low hanging fruit

Paul Broad and I posted our fall edition of the Hicks Morley Information and Privacy Post today. It’s available here. In addition to some brief commentary on “data breach low hanging fruit,” we’ve included summaries of cases that we’ve reviewed since publishing our spring edition. The top draws in our current edition:

  • The Divisional Court’s FOI decision on the annonymization of databases and whether replacing a unique identifier (that is also personal information) creates a new record
  • The Ontario Court of Appeal’s finding that the public interest override in Ontario’s FOI legislation is unconstitutional and its reading-in remedy
  • A decision by labour arbitrator Paula Knopf on a challenge to an employer’s short term disability administration practices
  • The latest Ontario decision in the recent flare-up in drug testing litigation, a decision by labour arbitrator Jane Devlin
  • A June 27th American e-discovery case that illustrates how not to manage a complex e-discovery project

Please check out the Post. Hope you enjoy!

Recent appeal court decisions illustrate wisdom of reasonable restrictive covenants

The Ontario Court of Appeal issued a short endorsement in Crystal Tile and Marble Ltd. v. Dixie Marble & Granite Inc. on August 20th, upholding a judgment that dismissed a claim against a high-performing ex-salesperson. Presumably the salesperson was not bound by a restrictive covenant because the claim was based on an alleged breach of fiduciary duty and breach of confidence. The Court endorsed the following passage from the trial judgment:

The fact that the business decision to rely so heavily on Mr. Miskiewicz may have turned out to be a less than prudent one is not sufficient to brand Mr. Miskiewcz as a as a fiduciary when the other hallmarks of a fiduciary relationship, such as the power to make or influence management decisions or set corporate policy, are absent. To find otherwise would mean that every salesperson, regardless of his or her position or authority in the business, would have a fiduciary duty simply because of his or her success in sales.

This comment is reminiscent of those made recently in Imperial Sheet Metal Ltd. v. Landry and Gray Metal Products, a decision of the New Brunswick Court of Appeal. The Court held that cases (including some leading Ontario cases) that find salespeople to be fiduciaries based on a vulnerability arising from exposure to customers are wrong: “too many employees of ‘humble origin’ are being swept into fiduciary net.” It also held that knowledge of customer needs and preferences generally does not have the quality of confidence necessary to found an action for breach of confidence.

These cases are significant for their denouncement of the case commonly made against departing salespersons who are not bound by restrictive covenants. They’re reason for employers to carefully consider bargaining reasonable restrictive covenants at the outset of the employment relationship.

Virginia Tech internal reports released

As I’ve posted about here and written about here, the Virginia Tech shooting has served as a good discussion point for how a post secondary institution’s duty to maintain a safe campus environment should be balanced against its duty to respect student privacy. Yesterday the University released reports from three internal committees struck shortly after the incident to examine the strengths and weaknesses of its systems. One of the reports, that of the school’s “Interface Group,” examines the security/privacy balance and echoes some of thoughts about the need for information sharing that were first expressed in the special report made to President Bush on June 13, 2007. For a flavour, here’s of one of the internal group’s seven recommendations:

Effective communication among units regarding at-risk students is essential. There are a number of recommendations intended to enhance communication in the system including conducting on-going training for personnel on the application of the Family Educational Privacy Act (FERPA) in the discussion of cases, clarifying public statements in university policy on how FERPA is applied, establishing a central university contact who has a comprehensive picture of distressed students who have been assessed by the system, clarifying policies for communicating with external agencies regarding acutely distressed students, and implementing a new policy for emergency notification for students.

According to the New York Times, a report from a panel struck by Virginia Governor Tim Kaine will be released late next week.

Case Report – Departing employees and the injunction standard

On July 3rd the Ontario Superior Court of Justice dismissed a motion for an interlocutory injunction in a departing employee case where the plaintiff claimed breach of fiduciary duty, breach of contract (notice of resignation and non-solicitation provisions) and breach of confidence.  The claim and motion were brought after a senior investment advisor and his two subordinates joined a competitor.The award is most notable for its clear statement on the standard to be applied on the first part of the RJR-MacDonald test.

I agree that where alleged breaches of restrictive covenants or fiduciary duty are asserted in an attempt to restrict a person’s ability to engage in their chosen vocation the higher standard strong prima facie case should be applied.  Where the allegation relates to breach of common law duties regarding use of confidential information to compete, the test is serious issue because it involves protection of employer’s rights as opposed to restraint of trade.

The Court held that the plaintiff did not establish the strong prima facie case necessary to support an injunction restraining further solicitation of its clients.  Although the Court held that the plaintiff did establish a serious issue to be tried in its request for an injunction to restrain further use of its confidential information (client lists), the Court held that the plaintiff did not establish irreparable harm and did not establish that the balance of convenience favoured an injunction.  In addressing the balance of convenience, the Court stated, “I think it is also important to consider in this discussion the interests of clients about who the fight is really all about and who are entitled to have access to the investment adviser of their choice.”

BMO Nesbitt Burns Inc. v. Ord, 2007 CanLII 2463 (Ont. S.C.J.).

Case Report – Principles endorsed in Arar secrecy decision

On July 24, the Federal Court ordered a portion of the information that had been redacted from the report of the Maher Arar Commission to be released.

In September 2006 the Commission objected to the government’s decision to redact 1500 words from its public report on the grounds their disclosure would cause injury to Canada’s international relations, national defence or national security. It gave notice of its position and, in response, the government applied for an order prohibiting disclosure under section 38.04 of the Canada Evidence Act.

The information ordered to be released by the Federal Court can only be discerned by viewing the Commission’s Addendum because the publicly-available court decision (for security reasons) discusses principles but does not apply them to the information in dispute.

The Court applied the three-part test from Canada (Attorney-General) v. Ribic while also acknowledging that its jurisdiction should be exercised in a manner respectful of the uniqueness and utility of commissions of inquiry. Here are some of the principles it endorsed:

  • A section 38.04 application is not a judicial review proceeding, and the Federal Court does not owe any measure of deference to government or its delegate. At the same time, the Court held that the Commission’s decision should be considered in answering the first and third part of the Ribic test.
  • In determining whether disclosure would be injurious to national security, national defence or international relations, courts should give deference to decisions of the executive. However, the executive’s opinion must have a factual basis and be established by evidence.
  • Disclosure of information that is in the public domain may still be injurious. It depends on how much information has been disclosed, whether it is widely-known, whether its authenticity has been confirmed or denied and the circumstances in which inadvertence led to its disclosure.
  • Information that is critical of or embarrassing to the government cannot be protected on that basis.
  • “National security,” as it is protected by the Canada Evidence Act, means “the preservation of the Canadian way of life, including the safeguarding of the security of persons, institutions and freedoms in Canada.”
  • The “third party rule” (an understanding that intelligence agencies providing information to other agencies will control the information’s subsequent use and disclosure) is “of essence to guarantee the proper functioning of modern police and intelligence agencies.” Intelligence allegiances of importance should be given greater protection.
  • The “mosaic effect” (an understanding that information which in isolation appears meaningless or trivial could, when fitted together, permit a comprehensive understanding of the information being protected) on its own will not usually provide sufficient reason to prevent disclosure of what would otherwise appear to be an innocuous piece of information. There must be some factual basis for the government’s mosaic effect claim.

The Court also identified seven factors to be assessed and weighed against one another to determine whether the public interest lies in disclosure or in non-disclosure.

Canada (Attorney-General) v. Commission of Inquiry into the Actions of Canadian Officials in Relation to Maher Arar, 2007 FC 766 (CanLII).

Case Report – Use of meta tags and passing off

On July 7th the Ontario Superior Court of Justice dismissed a motion for an interlocutory injunction brought, in part, on a breach of confidence claim. 

The treatment of the confidentiality claim is very fact-specific.  Not surprisingly, Madam Justice Low held that it would not be reasonable for her to draw an inference that a company that developed and hosted an online retailer’s website misused the retailer’s confidential information merely because it had started a directly competitive business (in the adult footed pajama market, if you care).

Although intellectual property is beyond the scope of my real interest (and what I will normally speak to in this blog), you may be interested in Madam Justice Low’s obiter comments about the defendant’s improper use of the plaintiff’s trade name as a meta tag.  She said:

It seems to me that an obvious (though not necessarily the only) reason for FOW’s use of the phrase “Jumpin Jammerz” as a meta tag for its website was to draw members of the internet public to its site who had some prior knowledge of Jumpin Jammerz as a vendor of pajamas and believed that they could find footed pajamas at the website associated with the words “Jumpin Jammerz”.


Had it been necessary, I would have made an order restraining the use of the phrase “Jumpin Jammerz” as a meta tag in association with FOW’s  website in these circumstances given that the phrase is not descriptive of the wares and an arguable case could be made that its use as a meta tag was for the purpose of diverting or luring members of the public to a site that was not in fact connected with the business known as Jumpin Jammerz at all. It was not necessary, however, for the motion to be pursued on this issue, as the defendants have removed the meta tags to which the plaintiffs objected and do not assert an intention or desire to recommence using them.

The defendant had agreed to remove the offending tag from its website, thereby making an order unnecessary.

Pandi v., 2007 CanLII 27028 (Ont. S.C.J.).

Why the name change?

I imagine I’ve broken a cardinal rule of blog branding, but I thought I’d change the name before I do this for too much longer.  I wanted to replace “Michaluk’s Information & Privacy Pages” with “All About Information” to reflect the blog’s breadth. 

Privacy is a rapidly-developing area of substantive law, but it is not all that’s  driving my interest.  Lateral employee movement is putting pressure on organizations as they attempt to protect their confidential business information.  And if the experience in the United States is a valid basis for prediction, electronic records management (or non-management as it be) is going to cause some extremely interesting developments in the law of production and access to information law in the next while.

 So there it is.  Part privacy, and part more.  I hope you’ll enjoy!