Knowledge of pay rates wasn’t confidential, so it didn’t breach duty

Gertz v. Meda [2002] O.J. No. 24 (O.S.C.)

Ralph Gertz worked for Meda, a company which contracted workers to Chrysler Canada. Gertz brought a wrongful dismissal claim against Meda. Meda counterclaimed, alleging that in his dealings with a rival company Gertz breached his fiduciary duty to Meda.

Gertz wrote a memo to Meda’s management in May 1994 detailing his concerns with morale among Meda’s contracted workers at Chrysler. He suggested a number of changes affecting pay, holidays and employee premium programs to better the situation.

Meda terminated Gertz’s employment within weeks of this memo without notice. Gertz found a position with Accu-Staff, a rival firm that hoped to use Gertz to acquire the Chrysler account. In October 1994 Gertz left Accu-Staff as he was unable to land the Chrysler account.

In 1995 Accu-Staff was approached by Chrysler to forward a bid, and they won part of the contract which Meda had previously exclusively held with Chrysler. Meda claimed that even though Accu-Staff was not employing Gertz in 1995, the only way it could have successfully outbid Meda was by using his knowledge of Meda’s confidential business information.

It was conceded by Meda there was no just cause for the termination and both sides agreed that eight months was an appropriate notice period.

As to the counterclaim, the judge held employees of a company owe a duty of confidentiality to their former employers in certain circumstances. In this case, however, Gertz did not violate that duty. His knowledge of the generous pension plans of Chrysler employees was not a violation of confidentiality as it was a widely known fact.

As to Gertz’s knowledge of Meda’s pay rates, the judge found this information was not confidential but that, even if it was, Gertz had not used the information in an unfair way to hurt Meda.

It would be almost impossible to separate Gertz’s expertise in the field from the type of knowledge he obtained at Meda. And considering it was the wrongful dismissal of Gertz that sent him to a rival firm, the court held that Meda could not rightly claim it was taken advantage of by Gertz.

The loss of Meda’s business was the result of a business decision by Chrysler after Meda did not adequately deal with issues of employee morale. It was not a result of the unfair use of confidential information by Gertz. The counterclaim was dismissed.

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