



COURT OF APPEAL FOR ONTARIO

CITATION: MD Physician Services Inc. v. Wisniewski, 2018 ONCA
    440

DATE: 20180509

DOCKET: C64213

MacPherson, Hourigan
    and Benotto JJ.A.

BETWEEN

MD Physician Services
    Inc. and MD Management Limited

Respondents (Plaintiffs)

and

Duane Wisniewski, Joy Sleeth and RBC Dominion
    Securities Inc.

Appellants (Defendants)

Nigel Campbell and Doug McLeod, for RBC Dominion
    Securities Inc.

Kenneth Dekker and Annie Tayyab, for the respondents

Heard and released orally: May 1, 2018

On appeal from the judgment of Justice Wolf Tausendfreund
    of the Superior Court of Justice dated July 21, 2017.

REASONS FOR DECISION

[1]

The appellants Joy Sleeth and Duane Wisniewski are
    two former employees of the respondent companies (MD). They, together with
    their current employer, the respondent RBC Dominion Securities Inc. (RBC),
    appeal from the trial judges finding that they breached the non-solicitation
    terms of their employment contract with MD.

[2]

The appellants were hired by MD in 2003 and 2005
    respectively. Their job was to provide financial services to MDs clients who
    are primarily physicians. They each signed identical non-solicitation
    agreements which provided as follows:

Non-Solicitation.
The Employee agrees that the Employee
    shall not solicit during the Employees employment with the Employer and for
    the period ending two (2) years after the termination of his/her employment,
    regardless of how that termination should occur, within the geographic area
    within which s/he provided services to the Employer.


Solicit
means:
    to solicit, or attempt to solicit, the business of any client, or prospective
    client, of the Employer who was serviced or solicited by the Employee during
    his/her employment with the Employee.

[3]

Sleeth and Wisniewski left MD in 2013 to join RBC, a competitor company.
    On their first day of work with RBC, the appellants wrote out from memory a
    list of MDs clients that they had serviced and began phoning them.

[4]

A trial proceeded on the issue of the
    enforceability of the contract only. Damages were left to another day.
    Following eight days of testimony and written and oral submissions, the trial
    judge concluded that Sleeth and Wisniewski had breached the non-solicitation
    agreement and that RBC was vicariously liable for the breach.

[5]

The appellants submit that the trial judge erred
    by applying the wrong legal principles to the enforceability of restrictive
    covenants and non-solicitation clauses in an employment law context. In particular,
    they allege that the agreement was ambiguous in regard to the term solicit,
    the geographic scope, the applicability to prospective clients, and the temporal
    length of the restriction. They also allege errors relating to the formation of
    the contracts generally.

[6]

The appellants primary submission, however, is
    that the agreement was so ambiguous  particularly with respect to the meaning
    of solicit  that it must be unenforceable.

[7]

We do not agree.

[8]

The meaning of the word solicit is obvious.
    The calls made by the appellants to former clients were not  as the appellants
    suggest  courtesy calls.  They were clearly made with a view to bringing the
    clients to RBC. The calls were made immediately after being hired by RBC, they
    were made personally, by telephone and followed a predetermined structure. The
    evidence supports the trial judges conclusion that the calls were to solicit
    business.

[9]

The trial judge properly directed himself with respect
    to the
legal principles that address the enforceability of a
    non-solicitation clause. He referred to and applied the test in
Elsley
    Estate v. J.G. Collins Agencies Ltd.
, [1978] 2 S.C.R 916, and
H.L.

Staebler
    and Co. v. Allan
, 2008 ONCA 576. He concluded that MD is a specialized
    company dealing with physicians and has a proprietary interest in ensuring that
    its business is not used by financial planners to take customers away from it.

[10]

He
    found that the clause was reasonable in terms of the public interest. It
    protects MD without unduly compromising its employees. There was no ambiguity
    with respect to the two year term.

[11]

The
    scope of the proscribed activities was clearly defined by the agreement. Sleeth
    and Wisniewski were not to solicit the business of clients or prospective
    clients they had serviced or solicited while employed by the respondents for a
    period of two years after they left MDs employ. As well, the geographical
    scope was reasonable.

[12]

Contrary
    to the appellants submission, the trial judge was alive to the distinction
    between non-competition clauses and non-solicitation clauses. He referred to
Staebler
at para 42 :

. . . a non-solicitation clause  suitably
    restrained in temporal and spatial terms  is more likely to represent a reasonable
    balance of the competing interests than is a non-competition clause. An
    appropriately limited non-solicitation clause offers protection for an employer
    without unduly compromising a persons ability to work in his or her chosen
    field. A non-competition clause, on the other hand is enforceable only in
    exceptional circumstances.

[13]

With
    respect to the formation of the contracts, the trial judge found that the
    individual appellants were provided with a copy of the non-solicitation
    provisions before starting their employment. This was a factual finding open to
    him on the evidence as were other factual findings made in his judgment. There
    is no reason for appellate intervention.

[14]

The
    appeal is dismissed with costs payable to the respondents in the agreed upon
    amount of $55,000 inclusive of disbursements and HST.

J.C. MacPherson J.A.

C.W. Hourigan J.A.

M.L. Benotto J.A.


