The Quebec Court of Appeal (Court) has established that employees who terminate their employment relationship without notice may work for a competitor without necessarily violating their duty of loyalty. However, resigning employees still have the obligation to make reparation for harm caused by their failure to provide notice, the Court ruled.
The Civil Code of Quebec stipulates that, pursuant to an employment contract for an indeterminate term, employees may terminate their employment relationship by giving reasonable notice to their employer. The purpose of this notice is to provide employers with enough time to recruit and train a replacement or undertake other measures in preparation for a resigning employee's departure.
Employees who fail to give reasonable notice therefore violate their obligations to their employer and expose themselves to a claim for damages. However, employers must prove that the harm suffered results from the absence of notice.
In Pharmacie Jean-Sébastien Blais inc. c. Pharmacie Éric Bergeron et André Vincent inc., the Court indicated that the damages that may be awarded to the employer are intended to repair the harm resulting from the absence of notice and not the employee's resignation.
In this matter, the employee, a laboratory technician, resigned without giving reasonable notice after 32 years of service, to work for a competing business. In its decision, the Court rejected the employer's argument that the resigning employee had violated his duty of loyalty by meeting with a competitor prior to his resignation to offer the competitor his services, and by failing to inform his employer of his intention to work for a competitor.
The Court ruled that in order to recognize that employees have the right to work for a competitor once the employment relationship with their employer has ended necessarily implies that an employee has the right to take certain steps to obtain such employment.
However, the Court did confirm the lower court decision regarding the claim for damages caused by the employee's failure to provide notice to his employer, but it rejected the analytical framework used to assess these damages.
The lower court had correctly concluded that it was the employee's untimely resignation that caused harm to the employer, the Court stated. However, the lower court erred in assessing the harm suffered by the employer by using the salary that the resigning employee would have earned during the notice period that should have been given.
According to the Court, the harm suffered by the employer corresponds rather to the decrease in goodwill during the two months following the employee's untimely resignation.
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