2551965 Ontario Ltd. purchased Cabin Country Realty Ltd. from Harold Warkentin in 2016. The sale included a non-compete clause restricting Warkentin from competing in Northwestern Ontario for three years after his employment ended.
Warkentin continued working for Cabin on a commission basis but was terminated for cause in 2017 after various allegations of misconduct.
Following his termination, Warkentin breached the non-compete clause by engaging in real estate activities and soliciting clients in the restricted area.
Claims:
Plaintiffs claimed damages for breach of the non-compete clause and interference with contractual relations.
Defendant counterclaimed for wrongful dismissal.
Issues:
Did Cabin have just cause to dismiss Warkentin?
Did Warkentin's conduct constitute wilful misconduct under the Employment Standards Act (ESA)?
If no just cause existed, what notice period and damages were owed?
Were the restrictive covenants enforceable?
Were the plaintiffs entitled to punitive damages?
Court's Decision:
Cabin had just cause for dismissal due to Warkentin's unprofessional conduct and threats of violence.
Warkentin’s actions constituted wilful misconduct under the ESA, nullifying any claim for damages.
The non-compete clause was found to be overly broad and unenforceable.
Punitive damages were denied.
Outcome:
Both the plaintiffs' claim and the defendant’s counterclaim were dismissed, with a potential case conference on costs.
