Dance school justified in firing teacher who advertised his own school

Gautreau v. Arvelo, 2004 CarswellOnt 5927 (Ont. S.C.J.)

A court has ruled that a dance teacher who advertised his own school to clients of the dance school he worked for was not entitled to notice when he was dismissed. But it stopped short of awarding damages to his former employer.

Diego Arvelo was hired by Joyce Gautreau in August 1998 to teach at the Brockville School of Dance. The employment contract he signed included a provision to not solicit studio clientele “for the duration of the Brockville School of Dance and Gymnastics Inc. existence”. He signed similar contracts through the 2000-2001 academic year but did not sign for 2001-2002.

Arvelo put on several one-day workshops in the area and kept all the profits. This was done with the knowledge and support of Gautreau, who gained clients for the dance school that way. But at a January 2002 fundraiser for students involved in competitive dance, Gautreau came to believe Arvelo was using the event to promote a business that would be in competition with hers. She confronted him at his next dance class.

Three weeks later Arvelo delivered a letter to Gautreau stating he would stay on until the end of the term, that he would be opening his own studio in September, and that he would be running his own workshops from his own facilities. Shortly afterward Gautreau terminated Arvelo’s employment.

Gautreau filed an action against Arvelo, claiming breach of contract and breach of fiduciary duty. The duty arose by reason of her vulnerability to the strong relationship a teacher can form with students which left her exposed, she claimed. Arvelo counterclaimed for damages for unlawful termination.

Although there was no signed contract between the parties for 2001-2002, the court ruled they had operated as if the old contract was still in effect. By its terms the non-solicitation clause would also be in effect, but its terms — mainly no solicitation of clients for as long as the Brockville school was in existence — were “unreasonably broad and as such unenforceable.”

Arvelo was also not bound by any fiduciary duty to the school. He was not in management, did not possess confidential information, made no decisions and had no control over any aspect of its business. He had authority in the classroom only, but Gautreau set the class schedule and class size and decided when he would teach. That the students were likely to become attached to their teacher does not create a fiduciary duty.

The court did rule, however, that Arvelo had sent out flyers advertising his own school while he was still working for Gautreau’s school. This was in breach of his obligations to his employer, and thus Gautreau had cause to dismiss him without notice.

Although eventually 45 clients from the Brockville school registered at Arvelo’s new school, the court ruled Gautreau was not entitled to damages. None of the clients transferred because of the improper solicitation: six moved because they had close ties to Arvelo, the rest because of Arvelo’s personal skills and abilities as a teacher.

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