In our Focus newsletters of January and May 2007, we reported on three Superior Court decisions applying the American "inevitable disclosure" doctrine.
In a decision rendered last September 29th, the Superior Court dismissed a motion for permanent injunction for the reason that this doctrine cannot be applied in Québec law in the absence of a non-competition clause.
In this case, a publishing house applied to Superior Court for a permanent injunction to prevent a former employee (the head of the English second-language edition) from becoming involved in the development of new English second-language educational material for a competitor. The former employer alleged that working on that project would lead to inevitable use or disclosure of confidential information obtained by the ex-employee in connection with her job, in breach of her confidentiality undertaking and duty of loyalty.
To apply the inevitable disclosure doctrine to information, American jurisprudence requires the simultaneous presence of several conditions: bad faith or reprehensible conduct on the part of the employee, a similar position with the new employer, the existence of a trade secret and efforts made by the former employer to protect the information (in particular by having a non-competition clause in the employment contract). In this case, the Superior Court found that those conditions were lacking.
In addition, according to the Court, great caution must be exercised before introducing doctrines from a foreign legal system into Quebec law. Thus, accepting the inevitable disclosure doctrine in Quebec law, absent the employee’s bad faith and absent a non-competition clause, would breach the fundamental principles of Quebec civil law and, in particular, the principles of freedom to work and freedom to compete, the presumption of good faith, and the lack of an implicit non-competition clause in an employment contract.
The Superior Court also recalled that there is no implicit obligation precluding an employee from working for a direct competitor of his former employer, absent a non-competition clause, and that the duty of loyalty cannot interfere with the freedom to work and compete. Thus, absent a non-competition clause or other clause restricting the freedom to work the applicable law is Article 2088 of the Civil Code of Quebec respecting the employee’s duty of loyalty and obligation of confidentiality.