Breach of Confidence — Ontario Employment Law
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About Breach of Confidence
When an employee leaves an organization, the boundary between the general skills they have acquired and the proprietary data they cannot take is often contested. In Ontario, the legal claim used to address the unauthorized misuse of sensitive company data is known as a "breach of confidence." While employers frequently rely on written confidentiality clauses to protect their business interests, a claim for breach of confidence is an equitable remedy that exists at common law independently of any written employment contract.
To successfully establish a legal breach of confidence in an Ontario court, an employer typically must satisfy a well-established three-part framework. First, the information must possess a genuine "quality of confidence"—meaning it is not public knowledge and the company has taken steps to keep it secret. Second, the information must have been imparted to the employee under circumstances where an obligation of confidence is apparent. Finally, there must be an unauthorized use of that information to the detriment of the employer, such as using it to solicit clients for a new competing business or sharing trade secrets with a rival.
In the employment context, this claim often surfaces alongside allegations of breaches of fiduciary duty or non-competition clauses. However, everyday employees who are not senior executives (and therefore not fiduciaries) can still be successfully sued for a breach of confidence if they actively misappropriate trade secrets, client lists, or financial data.
When a breach of confidence is suspected, employers frequently seek an interlocutory injunction—an urgent, temporary court order designed to stop the former employee from using the data or working for a competitor until a full trial can be held. Conversely, employees facing these claims may defend themselves by proving the information was publicly available industry knowledge or merely a product of their own general experience and skill.
Untangling what belongs to the worker's own professional toolkit and what legally belongs to the company is a highly fact-driven exercise. The line between harmlessly remembering a contact's name and unlawfully leveraging proprietary business intelligence is incredibly thin. Because every situation depends heavily on the rank of the employee, the nature of the data, and the specific actions taken upon departure, securing tailored advice from an Ontario employment lawyer is critical when either launching or defending against these allegations.
Frequently Asked Questions
What exactly constitutes a legal breach of confidence by a former employee in Ontario?
A legal breach of confidence occurs when an employee takes proprietary information that was shared with them in trust and misuses it for their own gain or to harm the employer. The employer must prove the data was truly secret, was entrusted to the employee confidentially, and was used without authorization.
Can my old boss sue me for breach of confidence if I never signed a confidentiality agreement?
Yes. Even without a signed contract or restrictive covenant, Ontario common law imposes a basic duty of good faith on all employees. You cannot deliberately misappropriate trade secrets or internal client lists, regardless of whether you signed a formal non-disclosure agreement.
Can I keep confidential documents to prove I was wrongfully dismissed or mistreated?
Ontario courts generally reject the argument that alleged employer misconduct entitles an employee to keep confidential internal documents. If you have a legal claim against your employer, evidence must be formally requested through the proper litigation discovery process, not by secretly retaining company property.
How quickly does an employer need to act if they suspect a former employee stole data?
Employers should move immediately to issue a cease and desist letter or seek an interlocutory injunction. If an employer waits months before taking legal action, a court may determine that the business is not suffering urgent, irreparable harm, which can jeopardize their chance of obtaining a court order.
What is the penalty if a court decides I committed a breach of confidence?
Remedies can be severe and may include injunctions barring you from working for a specific competitor, orders to permanently destroy or return the illicit data, financial damages to compensate the employer for lost business, and paying a portion of the company's legal costs.
When should I consult an employment lawyer about a confidentiality dispute?
You should seek professional counsel immediately if you receive a cease-and-desist letter from a past employer, or if you are an employer discovering data anomalies following a resignation. Immediate legal intervention can often prevent the dispute from escalating into costly, urgent injunction hearings.
Common Scenarios
- A departing executive secretly transfers gigabytes of proprietary pricing models and strategic design files to a personal cloud drive during their final week of employment, prompting the company to rush to court for a mandatory injunction demanding the destruction of the materials.
- A group of software engineers resigns to form a competing startup. They submit a response to an industry Request for Proposals (RFP) using distinct, proprietary methodologies they memorized from their previous employer, resulting in an arbitration dispute over the origin of the intellectual property.
- A long-time salesperson leaves to join a competitor and begins calling their old customers. The former employer alleges a breach of confidence, but during summary judgment, the court rules that the prospect list was common knowledge within the industry and the salesperson was merely drawing on their own general experience.
What You Should Know
- Never forward sensitive company documents to your personal email address in the days leading up to your resignation, as employers routinely audit departing employees' computer activity and will use this as evidence of misappropriation.
- If you are an employer, clearly categorize and restrict access to highly sensitive business materials; it is challenging to prove a legal breach of confidence if the allegedly secret information was saved on a shared drive accessible to everyone in the company.
- Do not assume that modifying or tweaking a former employer's template makes it your own. Using the core confidential architecture of an employer's document can still ground a legal claim for breach of confidence.
- Both individuals and companies should evaluate the strength of their evidence with a seasoned employment litigation lawyer before initiating or responding to demands, as alleging a breach of confidence without proof can trigger liabilities for the employer.
Featured Cases
Titus Steel Company Limited v. H.
2025 ONCA 693 (CanLII) · 2025-10-09Former Employee Fiduciary Duties Appeal
This is an appeal from a trial decision concerning a former employee who established a competing business after resigning. The Court of Appeal reviewed whether the respondent owed fiduciary duties, whether those duties were breached, and whether the trial judge's reasons were sufficient for appellate review. The appeal was dismissed as there was no reversible error in the trial judge's findings.
Total Meter Services Inc. v. GVM Integration
2025 ONCA 321 (CanLII) · 2025-04-29Former Employee Liable for Breach of Confidence and Duty
This was an appeal to the Court of Appeal from a trial decision about a former employee's breach of fiduciary duty and confidence. The employee formed a competing business and used the employer's source code and confidential information. The trial judge found the employee liable and awarded $750,000 in disgorgement of profits. The Court of Appeal upheld the liability finding but allowed the appeal in part because one of the claims added by amendment (the "TCS Opportunities claim") was a new cause of action and statute-barred under the Limitations Act. The damages were reduced to $518,659.26.
Northwest Protection Services Ltd. v. W.
2024 ONSC 1292 (CanLII) · 2024-03-01This is a contractual dispute involving allegations of breach of contract, fiduciary duty, and breach of confidence against an individual associated with Northwest Protection Services Ltd. The case also raises issues of constructive trust and misrepresentation under the Private Security and Investigative Services Act.
R. v. Ecolab Co.
2023 ONSC 5995 (CanLII) · 2023-10-23Former Employee Breach of Confidence & Fiduciary Duty
This interlocutory proceeding addresses whether a former employee breached fiduciary duties and employment contract confidentiality obligations by retaining and attempting to use confidential documents after termination. The court rejected the plaintiff's argument that alleged employer misconduct negated the confidentiality of the documents and granted an injunction requiring the destruction of unlawfully obtained materials to prevent misuse of confidential business information.
Morgan Canada Corporation v. M.
2023 ONSC 5217 (CanLII) · 2023-09-15Former Employees: Injunction for Breach of Confidence Dismissed
This interlocutory motion addressed a plaintiff's request for an injunction to prevent former employees from working for a competitor and using confidential information. The court applied the RJR-MacDonald test and found that the plaintiff failed to demonstrate a strong prima facie case for breach of fiduciary duty, breach of confidence, or spoliation of evidence. Consequently, the court dismissed the application for an injunction and a sealing order.
Tar Heel Investments Inc. v. H.L. Staebler Company Limited
2022 ONCA 842 (CanLII) · 2022-12-05Insurance Broker's Book of Business and Tort of Conversion
This was an appeal to the Court of Appeal from a trial judge's decision in an action over an insurance broker's departure and transfer of client books to a new employer. The employer sued the broker and her new brokerage for conversion, breach of fiduciary duty, and other torts when she sold her client books to the new firm. The trial judge found she owned one book but not another, and awarded damages for conversion of the second book, declining to rule on the other claims. The Court of Appeal allowed the appeal and the employer's cross-appeal, finding the trial judge erred in his analysis of ownership and conversion of intangible property, and ordered a new trial on all causes of action.
PureFacts Financial Solutions Inc.et al. v. C. et al.
2022 ONSC 961 (CanLII) · 2022-02-10Non-Solicitation Enforceability: RFP Response Case
This case concerns a judicial review of an arbitration award regarding former employees and the enforceability of restrictive covenants. The court addressed whether responding to a Request for Proposals (RFP) constituted a breach of non-solicitation clauses and whether the use of limited proprietary information amounted to a breach of confidence. The arbitrator had found the non-solicitation clause overly broad and unenforceable, and the court reviewed whether this application of the legal test constituted an error of law.
W. v. Desjardins General Insurance
2021 ONCA 672 (CanLII) · 2021-09-29W. v Desjardins: Breach of Privacy Claim Struck
This was an appeal to the Court of Appeal from a motion judge's decision striking various claims. The appellants were an employee who was fired and her friend. The friend had listed the employee as a witness in an insurance tribunal case against the employee's employer, Desjardins, which then fired the employee. The motion judge struck the plaintiffs' claims for breach of privacy, punitive damages, and claims against Desjardins' counsel. The Court of Appeal upheld the motion judge's decision and dismissed the appeal, noting that no breach of privacy occurred because witness lists in a tribunal proceeding are not private, and that any bad faith claims relating to accident benefits had to proceed before the Licence Appeal Tribunal.
2298679 Ontario Inc. et al. v. Northern Homecare Solutions Inc. et al.
2019 ONSC 3055 (CanLII) · 2019-05-17Interim Injunction: Former Employees & Confidential Info
This is an interlocutory proceeding where the plaintiff sought interim injunctive relief and Anton Piller orders against former employees accused of breaching confidence and committing injurious falsehood by misusing confidential customer lists. The court denied the Anton Piller order as overly intrusive but granted a ten-day interim injunction, finding a serious issue to be tried and irreparable harm to the plaintiff's goodwill.
Cantol v. State Chemical
2019 ONSC 531 (CanLII) · 2019-01-28Fiduciary Duties & Confidentiality: Salesperson Case
This is a summary judgment decision involving a former long-term salesperson and their former employer, State Chemical. The court addressed whether the salesperson owed fiduciary duties and breached confidentiality by using customer information to benefit a competitor. The court dismissed the employer's claims, finding no fiduciary relationship existed due to a lack of decision-making power and control, and no misuse of confidential information was proven.
Shaver-Kudell Manufacturing Inc. v. Knight Manufacturing Inc., et al
2018 ONSC 5206 (CanLII) · 2018-08-07Former Employee Misappropriation of Trade Secrets
This case addresses whether a former employee breached her duty of confidence and good faith by misappropriating trade secrets and customer lists. The court found that the manufacturing processes and tooling constituted trade secrets and that the defendant's use of memorized customer information for a competitor established a breach of confidence.
Oz Optics Ltd. v J.R.Z.
2017 ONSC 4263 (CanLII) · 2017-07-11Disclosure in Breach of Confidence: Former Employees
This is an interlocutory procedural ruling concerning the scope of document disclosure in a breach of confidence action involving former employees. The court applied rules of civil procedure regarding relevance and proportionality to determine whether defendants' personal financial records and the plaintiff's financial statements should be produced in the context of allegations of misappropriation of confidential information.
G. v R.
2017 ONSC 1845 (CanLII) · 2017-06-27Union Officers Breach of Loyalty: Nominal Damages
This is an appeal to the Divisional Court from a trial judge's decision regarding union officers who resigned to engage in union raiding. The appeal concerned the trial judge's findings that the officers did not owe fiduciary duties or breach confidentiality, but did breach their common law duty of loyalty by soliciting stewards before resigning. Consequently, nominal damages of $500 were awarded to the union, and the costs decision was also appealed.
Catalyst Capital Group Inc. v M.
2016 ONSC 5271 (CanLII) · 2016-08-18Breach of Confidence: Former Employee & Spoliation
This was a trial-level decision regarding a breach of confidence claim brought by an investment management firm against a competitor, alleging that confidential information was conveyed by a former employee. The court dismissed the action, finding no evidence that the information was actually misused to gain an advantage in the acquisition of WIND Mobile, and rejecting speculative inferences regarding the transfer of data. The court also declined to find that the defendant's destruction of evidence constituted spoliation.
Marsh Canada Limited, D.J.M. and T.R.P.
2012 ONSC 3852 (CanLII) · 2012-06-28Former Employees: Discovery on Non-Compete & Confidentiality
This interlocutory motion addressed discovery disputes involving former employees accused of breaching confidence and violating non-competition clauses by soliciting a client. The court applied relevance and proportionality principles to determine if discovery requests regarding the defendants' post-employment activities were justified. Additionally, the court addressed the admissibility of a late-filed affidavit and awarded partial indemnity costs to the plaintiff.
GasTOPS Ltd. v. F.
2012 ONCA 134 (CanLII) · 2012-03-01Fiduciary Duties: Damages & Disgorgement for Former Employees
This appeal concerns former senior employees who breached their fiduciary duties and employment contracts by misappropriating confidential information and soliciting the employer's customers. The Court of Appeal addressed whether the trial judge erred in imposing fiduciary duties on the employees, calculating damages by including profits from military contracts, and determining a ten-year accounting period for disgorgement of profits.
Tsp-Intl Ltd. v. M.
2006 CanLII 22468 (ON CA) · 2006-07-04Independent Contractor: Implied Terms & Fiduciary Duty Appeal
This is an appeal to the Court of Appeal from a trial decision concerning an IT company that sued its former independent contractor, B.M., after he contracted directly with one of its major clients. The trial judge dismissed the company's pleaded claims of breach of fiduciary duty and breach of confidence, but found the contractor liable based on unpleaded theories of good faith and implied terms. The Court of Appeal ruled that the trial judge erred by deciding the case on theories that were never pleaded, which deprived the contractor of a fair trial. The appeal was allowed, the cross-appeal was dismissed, and the action was dismissed.
1259695 Ontario Inc. v. G.
2005 CanLII 17920 (ON SC) · 2005-05-20Breach of Confidence: Employee Soliciting Clients with Confidential Information
A labour and employment case involving a former employee who resigned and joined a competitor while using confidential customer information. The court considered whether an interim injunction should be continued to restrain the employee from soliciting clients and using confidential information, applying tests for interlocutory injunctions and breach of confidence.
Schauenburg Industries Ltd. et al. v. B. et al.
1979 CanLII 1893 (ON SC) · 1979-08-09Employment Contract Dispute: Breach of Fiduciary Duty and Confidentiality
A case involving a general manager who allegedly breached fiduciary and contractual duties by using confidential information and soliciting customers to start a competing business. The court considered whether the defendant owed a fiduciary duty, breached confidentiality, and violated contractual clauses requiring secrecy and exclusivity.
Tenatronics Ltd. v. H. et al.
1971 CanLII 498 (ON SC) · 1971-06-18Former GM Breach of Confidence: Interim Injunction Granted
This is an interlocutory proceeding regarding an interim injunction sought by a former employer against a former general manager and a competitor. The dispute centers on the former employee's breach of confidentiality and fiduciary duties by disclosing product designs to a competitor, raising issues of unfair competition and the adequacy of damages.