2023 QCCQ 2759, 2023 QCCQ 2759

Softsim Technologies Inc. c. Allard 2023 QCCQ 2759 COURT OF QUEBEC «Small Claims Division» CANADA PROVINCE OF QUEBEC DISTRICT OF MONTRÉAL "Civil Division" N° : 500-32-712363-201 DATE : May 4, 2023 ______________________________________________________________________ BY THE HONOURABLE DIANE QUENNEVILLE, J.C.Q. ______________________________________________________________________ SOFTSIM TECHNOLOGIES INC. Plaintiff vs.

DENIS ALLARD Defendant ______________________________________________________________________ JUDGMENT ______________________________________________________________________ THE OUTLINE [ 1 ] The Defendant, Denis Allard ( Allard ) was employed by the Plaintiff following the Employment Agreement which included a Confidentiality and Non-Competition Agreement ( Non Compete Agreement ). [ 2 ] The Plaintiff, SoftSim Technologies Inc. ( SoftSim ) complains that, following the resignation of Allard, he accepted to work for his competitor Valcom Consulting Group inc. ( Valcom ).

This resulted in SoftSim not succeeding in obtaining a new bid with the Department of National Defense ( DND ), causing it a loss of revenue that the Plaintiff estimates at over $24,000 plus damages, that SoftSim reduces to the sum of $15,000, renouncing to claim the difference. [ 3 ] Allard contests the claim on the basis that the Non-Compete Agreement is invalid. He adds that he did not occupy the same position with Valcom, nor did he participate in any manner in Valcom obtaining the bid with DND.

THE CONTEXT [ 4 ] On September 4, 2018, an Employment Agreement, for an undetermined term, was concluded between the parties [1] . [ 5 ] The Defendant was hired as a Procurement Specialist at the annual salary of $51,000, which at the time of his resignation had increased to $57,000. [ 6 ] In the Employment Contract, the Defendant acknowledges that he would have to sign the standard Confidential and Non- Competition Agreement of SoftSim [2] . [ 7 ] In May 2020, the Defendant resigned from his position with SoftSim and started working for Valcom. [ 8 ] The irony, is that Allard’s previous employer, before he started working for SoftSim, was Valcom, at essentially the same position as with SoftSim. [ 9 ] Both of these companies compete in providing services to DND. [ 10 ] In 2018, DND issues a new bid.

SoftSim, Valcom and others all compete to obtain the contract. [ 11 ] Allard explains that since 2019, he had a disagreement with SoftSim regarding the payment of public holidays and vacations. [ 12 ] In April 2020, Valcom contacted Allard to offer him a position and once Valcom obtained the bid from DND, Allard resigned on June 18, 2020, and started working for Valcom on July 3, 2020.

THE ANALYSIS [ 13 ] SoftSim claims an amount between $10,550 to $11,400, representing the 15% or 20% finding fee of Allard’s salary at $57,000 to compensate for two employees who worked on recruiting Allard’s replacement instead of bidding for contracts.

[ 14 ] In addition, SoftSim argues that, had it obtained a new contract with DND, there was a possibility of providing services for two additional years, representing 960 days at $25.15 per day, for an amount of $24,144 bringing the claim between $32,694 to $35,544, reduced at $15,000. [ 15 ] The Court can immediately conclude that no evidence was provided that had the employees work on obtaining contracts, they would have been successful.

All damages claimed are speculation and not an actual loss suffered by Softsim. [ 16 ] SoftSim relies on its Non Compete Agreement as the basis for its claim where we find the relevant clause: 3. NON-COMPETITION AND NON-SOLICITATION 3.1 The EMPLOYEE recognises and agrees hereby that during the TERM of his employment with SOLFSIM TECHNOLOGIES INC., he will devote all working hours, attention and energy to SOFTSIM TECHNOLOGIES INC. business and that he will not undertake into any other business activity for earning, profits or any other pecuniary advantages purposes or not.

When termination of employment with SOFTSIM TECHNOLOGIES INC., and for a period of two (2) years following the date, the employment will abstain:

a) to directly or indirectly contact , solicit or try to solicit (even of communication is started by any of the following persons), or to accept business or deal with, or to provide products or services to any person, business enterprises, company which has already been client to SOFTSIM TECHNOLOGIES INC. at any time during the six (6) months preceding the termination of employment of the EMPLOYEE , or to any associate or affiliate (as defined in the Business Corporation Act) of the client; [Reproduction partielle] [ 17 ] Allard contested the claim on the basis that the Non Compete Agreement is invalid as it is not limited as to place and type of employment, contrary to

Article 2089 of the Civil Code of Quebec : 2089. The parties may stipulate in writing and in express terms that, even after the termination of the contract, the employee may neither compete with his employer nor participate in any capacity whatsoever in an enterprise which would compete with him. However, the stipulation shall be limited as to time, place and type of employment, to what is necessary for the protection of the legitimate interests of the employer. The burden of proof that the stipulation is valid is on the employer. [ 18 ] Non compete agreements must comply with the conditions stated in this

Article and the burden rests on the employer to demonstrate that the non compete clause is valid. [ 19 ] A simple lecture of SoftSim’s Non Compete Agreement,

Article 3.1, shows that this clause is invalid and is not enforceable as it is not limited as to place and type of employment. [ 20 ] Moreover, as decided in Cameron and J.G. Collins decisions [3] , the Court must take the Non Compete clauses as written without any addition, reduction or modification. [ 21 ] That being said, SoftSim could rely on the general obligations imposed on any employee, as provided at

Article 2088 C.C.Q., namely to act faithfully and honestly and not use any confidential information. [ 22 ] However, this general obligation of acting faithful and honest, is far less restrictive then a non compete clause [4] . [ 23 ] In the present matter the evidence shows that Allard was dissatisfied and most probably very much appreciated by DND, considering the latter’s request that SoftSim hire Allard following his dismissal from Valcom.

Valcom was interested in hiring Allard once he learned of the latter’s displeasure with SolfSim employment. [ 24 ] The Court does not consider that Allard acted in bad faith or contravened his obligations of faithfulness and loyalty. [ 25 ] Irrespective of this conclusion, the Court considers that no evidence was provided that the only reason SoftSim did not obtain the bid with DND was because of Allard. SoftSim assumed this was the case, however, clear evidence of this element was required.

FOR THESE REASONS, THE COURT: DISMISSES Plaintiff’s claim; WITH COST in the amount of $209 representing the judicial stamp of the Contestation.

________________________ DIANE QUENNEVILLE, J.C.Q.