The former CEO of Imperial Parking Canada Corporation
("Impark") was recently ordered by the BC Supreme Court
to repay $1.2 million he received in severance pay after he was
found to have breached his fiduciary duties to Impark. The
CEO as well as individual and corporate defendants were also
ordered to disgorge all profits earned by GoPark (the new company
they started to compete with Impark) between January, 2012 and
While all employees owe general duties of good faith, loyalty
and fidelity to their employers, fiduciary employees are further
obliged to act in the company's best interests, especially when
their own interests conflict with those of their employers.
While the vast majority of employees are not fiduciaries, top
management employees almost always are. Title or formal
position is irrelevant. Whether an employee is a fiduciary or
mere employee is determined based on the specific facts and
circumstances of the individual case.
In this case, while still employed as Impark's CEO, Mr.
Anderson entered into a letter agreement with Michael Menzies, a
consultant with Impark and a personal friend of Mr. Anderson's,
releasing Mr. Menzies from one year of his consulting agreement,
and eliminating the 2-year non-competition clause in that
agreement. This effectively allowed Mr. Menzies to compete
with Impark a full 3 years earlier than he was permitted under his
consulting agreement. Mr. Anderson concealed the existence of
this side agreement. After Mr. Anderson left Impark, having
negotiated a severance package worth $1.2 million, he and Mr.
Menzies started competing with Impark through their new company,
The Court found that Mr. Anderson created the letter agreement
to further his and Mr. Menzies' own interests, contrary to the
interests of Impark, and he had therefore breached his fiduciary
duties to Impark. Mr. Menzies knowingly assisted with that
breach. The Court rescinded both the letter agreement and Mr.
Anderson's severance agreement. Mr. Anderson was ordered
to repay his severance, and all defendants were ordered to repay
any profits earned by GoPark between January, 2012 and March 15,
2014, which was the earliest that Mr. Menzies' non-competition
clause could have ended if he had given notice to terminate his
consulting agreement in January, 2012 when he learned of the GoPark
While the presence of a fiduciary relationship depends on actual
nature of the position, and is not dependent on job title or the
presence of a term in an employment agreement explicitly
recognizing that an employee is a fiduciary, it is a good idea to
include such language in an employment agreement for employees who
are in a fiduciary role within an organization so that all parties
are clear about the employee's role and associated
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Unfortunately, reasonable accommodation for employees in the workplace continues to be the source of significant litigation and even today we continue to see outrageous examples of employers behaving badly.
We are now beginning to see reported cases involving charges and subsequent fines laid against employers for failing to provide information, instruction and supervision to protect a worker from workplace violence.
On October 13, 2016, the Supreme Court of Canada denied leave to appeal an Ontario Court of Appeal decision which ordered an employer to pay a former employee 37 months of salary and benefits following termination.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).