Background:

• The dispute arose when Janssens and Mathieu, senior employees, left Southwest to start a competing business, allegedly recruiting other employees and using confidential information to gain an unfair competitive advantage.

Key Issues:

1. Whether the defendants breached their fiduciary duties, contractual obligations, or common law duties of good faith and loyalty.
2. Whether an interim injunction should restrain the defendants from competing with Southwest or using its confidential information.

Injunction Decision (2024 ABKB 502):

1. Fiduciary Duties:

   • Janssens was found to be a fiduciary due to his senior role and authority.
   • Mathieu, while important, was not classified as a fiduciary since his role lacked the requisite authority.

2. Breach of Duties:

   • No strong evidence of misuse of confidential information or direct solicitation of clients was presented.
   • Mathieu breached his duty of loyalty by soliciting junior employees before resigning.

3. Irreparable Harm & Balance of Convenience:

   • Southwest failed to prove irreparable harm, as alleged damages (loss of clients and projects) were speculative and quantifiable in monetary terms.
   • The balance of convenience favored the defendants, as granting the injunction would unduly restrict their ability to operate.

   Outcome: The injunction application was dismissed.

Costs Decision (2024 ABKB 698):

• The defendants, having succeeded in opposing the injunction, were awarded $92,500 (45% of solicitor-client costs), plus disbursements.
• Key considerations:
  • The application, while reasonable to bring, lacked substantive evidence for most claims.
  • The defendants had to defend against broad and later-abandoned relief claims, adding complexity to the case.
  • Preliminary procedural applications resolved by consent were deemed adequately compensated in the awarded costs.