IMPLIED DUTIES OF EMPLOYEE - Confidential information and privacy

Law360 Canada (February 10, 2021, 6:16 AM EST) -- Appeal by the defendants from a trial judgment finding them liable for breach of confidence. The respondent GEA Refrigeration Canada Inc. (GEA) was in the business of marketing and production of hygienic freezers. The individual appellants were former employees of GEA. They formed a competing company, FPS. All appellants had written agreements requiring them to maintain confidentiality over information belonging to GEA, including GEA’s engineering drawings. They also had agreements preventing them from entering into competition with GEA for a period of time after their employment terminated. The judge found that the individual appellants improperly used GEA’s engineering drawings and other confidential information to design products for sale by FPS in competition with GEA. The judge also found that the individual appellants breached express or implied obligations of confidence in their contracts of employment with GEA and awarded damages against them. The judge’s primary reason for inferring that FPS used the GEA engineering drawings to design and produce its own hygienic freezers was her view that such use was a practical necessity. She awarded damages of $7,131,087 against FPS, calculated based on disgorgement of profits for a period of approximately four years. She found the five individual appellants to be jointly and severally liable with the corporation for $3,630,000, assessed based on profits lost by GEA because of their tortious breaches of confidence and their breaches of express and implied confidentiality provisions of their employment contracts. The appellants argued the evidence was incapable of supporting the judge’s finding that the appellants possessed GEA engineering drawings and used them to design FPS freezers. The appellants also disputed the judge’s assessment of damages, arguing that the judge made legal errors in her assessment of damages, requiring FPS to disgorge profits for an excessive period....
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