Is an employee’s duty not to compete during the notice period inconsistent with the law concerning fiduciary duties?
Alberta, Canada
The following excerpt is from Carlsen v. Physique Health Club Ltd. (Physique Fitness Store), 1996 ABCA 358 (CanLII):
An employee’s duty not to compete during the notice period is also inconsistent with the law concerning fiduciary duties. Wilson J.’s discussion of the characteristics of a fiduciary type of relationship in Frame v. Smith 1987 CanLII 74 (SCC), [1987] 2 S.C.R. 99 are instructive on this point. They are: (1) The fiduciary has scope for the exercise of some discretion or power. (2) The fiduciary can unilaterally exercise the power or discretion so as to affect the beneficiary’s legal or practical interests. (3) The beneficiary is peculiarly vulnerable to or at the mercy of the fiduciary holding the discretion or power.
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