I Am a Fiduciary at My Company: What Duties Survive My Termination, and How Do They Affect My Next Job? An Ontario Executive's Guide

What fiduciary duties survive when a senior officer leaves an Ontario company?

Three duties survive. First, you cannot take for yourself or a new employer a business opportunity the company was actively pursuing while you were there. Second, for a reasonable period you cannot solicit the clients, customers and business relationships you managed for the company. Third, you cannot use or disclose its confidential information for as long as that information stays confidential.

The law imposes these duties because of the position you held. They do not depend on anything you signed. That is the most important point for an executive who has just read that Ontario banned non-competes. A void non-compete does not dissolve a fiduciary duty, because the fiduciary duty was never a clause in your contract.

What does not survive matters just as much. Once you leave, the law does not stop you from earning a living in your field. You can use the general skill, industry knowledge and reputation you built, and you can work for a competitor unless you are bound by a covenant that is valid under the statute and reasonable at common law. Your fiduciary obligations limit how you compete, not whether you compete.

Courts decide how far a departed fiduciary's duties reach by looking at the whole picture. The factors are well established:

• The position or office you held. A CEO's duties reach further than a regional director's.
• The nature of the opportunity, including how ripe and how specific it was. A signed letter of intent is very different from a sector the company had talked about entering.
• Your relationship to the opportunity. Did you lead the pitch, sit in on it, or only hear about it at a board meeting?
• The knowledge you had. Was it special or private, or something the whole industry knew?
• Time. The further you are from your departure date, the weaker the argument that a new deal is really the company's old one.
• How the relationship ended. Retirement, resignation and dismissal are treated differently. Resigning in order to take an opportunity is the most dangerous position. Being dismissed without cause is at the other end.

Am I actually a fiduciary, or just a senior employee with a big title?

Your title does not decide it; your power does. Directors and senior officers who run the company are fiduciaries. Below that level, an employee becomes a fiduciary when the company has given them so much discretion over its interests, client relationships or confidential strategy that it is vulnerable to how they use it. Many vice-presidents and managing directors qualify. Many people with 'director' in their job title do not.

Signs that a court is likely to treat you as a fiduciary, or as a key employee who owes similar duties:

• You set or approved pricing, margins or bids, or had authority to commit the company to deals.
• You were the face of the business to its major clients, and they dealt with you rather than with the company.
• You led, or sat on, the team pursuing acquisitions, new markets, large contracts or strategic partnerships.
• You saw board materials, budgets, pipeline reports or strategic plans that most of the workforce never saw.
• You managed a team that would hollow out a business line if it left with you.
• Your pay leaned heavily on equity, long-term incentives or deferred compensation designed to tie you to the company's long-term results.

The distinction matters because an ordinary employee has far more freedom after leaving. Every employee owes a duty of good faith and fidelity while employed. After leaving, an ordinary employee without an enforceable restrictive covenant may compete and may even approach former customers. The limits are that they must not misuse confidential information and must not have started soliciting before they left. A fiduciary carries an extra layer: the limits on soliciting and on taking opportunities continue for a period after departure, whether or not a covenant says so.

There is a useful irony here. The same features that make you a fiduciary tend to lengthen your notice period. Bardal v. Globe & Mail Ltd., 1960 CanLII 294 (ON SC) lists character of employment as a notice factor, alongside length of service, age and the availability of similar work. In Love v. Acuity Investment Management Inc., 2011 ONCA 130, a senior vice-president with only two and a half years of service received nine months' notice. The court said the character of the role and the equity that came with it made similar work harder to find. If your employer calls you a fiduciary to restrain you, expect your lawyer to hold it to that description when the notice period is calculated. See executive severance and notice in Ontario.

Which business opportunities am I barred from pursuing after I leave?

You are barred from taking a specific, maturing opportunity that the company was actively pursuing and that you worked on or knew about through your role. You are not barred from the market as a whole. The question is not whether a new deal is in the same industry. It is whether the deal is really the company's own deal, just moved to your new employer.

• Likely caught: a request for proposal the company was bidding on when you left; an acquisition target you were doing due diligence on; a renewal or expansion you were negotiating with a named client; a joint venture whose terms you were drafting; a site, licence or partnership the company had identified and was working to secure.
• Likely not caught: a new client in the same sector that the company never approached; a product line the company considered and dropped; a general strategy everyone in the industry is pursuing; opportunities that come up well after you left and did not grow out of the company's work.

Two features of the fiduciary rule surprise executives. First, resigning before you take the opportunity does not protect you; resigning in order to take it is the classic breach. Second, it is generally no defence that the company might not have won the deal anyway, or could not have afforded it. The rule is strict because it targets disloyalty, not just the company's loss.

The remedies also go further than in an ordinary contract claim. A court can grant an injunction. It can also order you to account for, and hand over, the profits you made from the diverted opportunity, instead of only compensating the company's provable loss. If your new role pays a transaction bonus or carried interest tied to that deal, the exposure can exceed your entire severance claim.

Can I contact my former clients, my old team and suppliers?

Not to solicit them, at least for a while. A departed fiduciary must not actively pursue the clients and business relationships they managed for the company for a reasonable period, even without a signed non-solicitation clause. A neutral announcement, a polite answer to an unsolicited call, and relationships you had before you joined are on safer ground, but none of them is automatically safe.

• Solicitation: a call, email, LinkedIn message or lunch meant to move a client's business is solicitation, whatever you call it.
• Announcements: a general notice that you have joined a new firm, sent broadly and without a pitch, is treated differently from a targeted note to your top ten accounts. The more targeted it is, the more it looks like solicitation.
• Unsolicited approaches: taking business from a client who finds you on their own is safer than chasing it. But if that client is part of an opportunity you were building for the company, the fiduciary analysis still applies.
• Your old team: planning a group move while you are still employed breaches the duty of good faith for any employee, and fiduciary duty for a senior one. After you leave, recruiting key members of your former team can also be caught, especially soon after departure.
• Suppliers and partners: the same reasoning applies where a supplier relationship or channel partnership was a company opportunity rather than simply a vendor you used.

A written non-solicitation clause is a second, separate layer. Nothing in the wording of s. 67.2 voids a genuine non-solicit, unless it is so broad that it works as a non-compete in practice. It must still be reasonable. In Elsley v. J.G. Collins Insurance Agencies Ltd., [1978] 2 SCR 916, the Supreme Court held that a covenant in restraint of trade is enforceable only if it is reasonable between the parties and with reference to the public interest. In Shafron v. KRG Insurance Brokers (Western) Inc., 2009 SCC 6, the Court added that courts will not rewrite an ambiguous or overbroad covenant to make it enforceable. The employer that drafted it lives with the drafting. For more on the contract side, see whether a non-solicitation agreement is enforceable and competing and soliciting clients after leaving.

Does Ontario's non-compete ban in ESA s. 67.2 protect me as a senior manager?

It protects most senior managers but not the C-suite. Section 67.2 of the Employment Standards Act, 2000 makes non-compete agreements void, but it exempts 'executives', and the Act defines that term narrowly to mean chief-level officers. A vice-president, managing director or general manager is usually not an 'executive' under the statute, even though they are very likely a fiduciary at common law.

The section is short, and at your level every word of it can matter. Here is each limb in turn.

• Subsection 67.2(1), the prohibition. 'No employer shall enter into an employment contract or other agreement with an employee that is, or that includes, a non-compete agreement.' Three phrases do the work. 'Employer' puts the prohibition on the company. 'Other agreement' reaches beyond the offer letter: on its words, it covers a non-compete placed in an equity award agreement, a bonus plan acknowledgment, a promotion letter, or a separation agreement you sign while still on the payroll. 'With an employee' does not say whether a covenant signed only after your last day is caught. If your equity award agreement is with a foreign parent rather than your Ontario employer, expect an argument about whether the parent is the 'employer'. Rahman v. Cannon Design Architecture Inc., 2022 ONCA 451 treated a parent company that directed, paid and pooled an executive as a common employer, which helps answer that argument.
• Subsection 67.2(2), the consequence. 'For greater certainty, subsection 5 (1) applies and if an employer contravenes subsection (1), the non-compete agreement is void.' Void means it never binds you. A court has no discretion to enforce it. The subsection voids the non-compete agreement, not your whole contract, so the rest of your employment agreement, including any non-solicit or confidentiality clause, is judged on its own terms.
• Subsection 67.2(3), the sale of business exception. The ban does not apply if all three of these are true. There is a sale of a business or part of a business. As part of that sale, the purchaser and seller agree to prohibit the seller from engaging in 'any business, work, occupation, profession, project or other activity that is in competition with the purchaser's business after the sale'. And 'immediately following the sale, the seller becomes an employee of the purchaser.' If you sold your company or your shares in it, signed a non-compete as a seller, and went straight onto the buyer's payroll, this limb may take you outside the ban. If you were an employee whose options were cashed out, and you signed a non-compete in your new offer letter, you were not the seller making that bargain, and the wording points the other way. For how service carries across a deal, see sale of business and continuity of service.
• Subsection 67.2(4), the executive exception. 'Subsection (1) does not apply with respect to an employee who is an executive.' This only switches off subsection (1). It does not make an executive's non-compete enforceable; the common law test must still be met. The subsection also does not say whether you must be an executive when you sign or when the company tries to enforce. That matters if you signed as a vice-president and were later promoted into the C-suite.
• Subsection 67.2(5), the definitions. An 'executive' is 'any person who holds the office of chief executive officer, president, chief administrative officer, chief operating officer, chief financial officer, chief information officer, chief legal officer, chief human resources officer or chief corporate development officer, or holds any other chief executive position'. 'Sale' 'includes a lease', so the subsection (3) exception can also apply when a business is leased rather than sold. Senior vice-president, executive vice-president, managing director, general manager, country manager and head of sales are not on the list. Whether a divisional 'president' or a newer chief-titled role counts as 'any other chief executive position' depends on what the role actually involves, not on the word 'chief' on a business card.

Subsection 67.2(2) expressly brings in section 5 of the Act, and section 5 blocks the obvious workarounds:

• Subsection 5(1): 'no employer or agent of an employer and no employee or agent of an employee shall contract out of or waive an employment standard and any such contracting out or waiver is void.' You cannot sign away the ban, whether in your offer letter, in a side letter saying you will be 'treated as an executive', or in a release. Sophistication does not change this. In Rahman v. Cannon Design Architecture Inc., 2022 ONCA 451, the Court of Appeal would not let an executive's experience and independent legal advice save a termination clause that offended the Act. The same logic makes it hard to see sophistication rescuing a non-compete the Act declares void.
• Subsection 5(2): a contract term applies in place of a standard only where it relates 'directly' to 'the same subject matter as an employment standard' and gives 'a greater benefit to an employee than the employment standard'. A promise not to compete is a burden on you, not a benefit, so this limb cannot rescue a non-compete. It matters elsewhere in your package: where a contract gives you more than the statutory minimum, that term is enforced as written.

The ban has four limits worth knowing. It does not touch fiduciary duties at all, because those are imposed by law, not by 'an employment contract or other agreement'. On its wording, it does not reach a covenant that stops you from soliciting clients or using confidential information but leaves you free to work for a competitor. It is deemed to have taken effect on October 25, 2021, so a non-compete signed before that date is judged only under the common law. And if your employer is federally regulated (a bank, telecommunications carrier, airline or interprovincial transport company, for example), the Employment Standards Act does not apply to you at all. See federally regulated employee rights, the federal position on non-competes and whether non-compete agreements are enforceable in Ontario.

What happens to my non-compete if I am in the C-suite or signed it before the ban?

It is judged under the common law, and the company has to prove it is reasonable. Most are not. Courts start from the position that a covenant stopping someone from working is presumed unenforceable. The employer must show a legitimate interest to protect and that the covenant's length, territory and range of activities go no further than necessary. An ambiguous or overbroad clause fails outright.

Shafron v. KRG Insurance Brokers (Western) Inc., 2009 SCC 6 also separates covenants given on the sale of a business, where the parties bargain on more equal terms, from covenants in employment contracts, which get stricter scrutiny. Where a non-solicitation clause would have been enough to protect the company's client relationships, a court is unlikely to accept that a non-compete was necessary.

If you were dismissed without the notice the law requires, you may hear that an employer who breaks the contract cannot hold you to its restrictive covenants. Ontario courts have not applied that argument consistently, so do not plan your next move around it. It also has no effect on your fiduciary duties, which do not come from the contract. At most, being dismissed rather than resigning is one factor in how far those duties reach.

How long do my fiduciary duties last after I leave?

There is no fixed period. The duties not to solicit and not to take opportunities last for a 'reasonable time'. That usually means long enough for the company to replace you and give your successor a fair chance to keep the relationships, or as long as a specific opportunity remains live. In most cases it is measured in months, not years. Confidentiality lasts as long as the information stays confidential.

The last row catches executives out. If your employer keeps you on the payroll through a notice period, working or on 'garden leave', you are still an employee and still owe your full duty of loyalty. Starting with a competitor or pitching clients before your end date is a breach during employment, not after it. Conduct during employment can also be alleged as cause. Whether it amounts to cause is decided in context, with a proportionate response required, under McKinley v. BC Tel, 2001 SCC 38, but you do not want to be the test case.

Does it matter whether I resigned or was dismissed?

Yes, in three ways. How you left is one of the factors that decides how far your fiduciary duties reach: resigning to pursue a company opportunity is the worst position, and a without-cause dismissal is among the better ones. How you left also decides whether you have a severance claim at all. And if you resign, you owe the company reasonable notice.

If you are thinking of leaving, the law allows ordinary preparation while you are still employed. You can look for a job, talk to recruiters, incorporate a company and speak to a lawyer. You cannot solicit clients, recruit your team, divert opportunities or copy information before you go. When those things happen during employment, they are often the core of the claims brought after a fiduciary leaves.

Be careful what you say in a heated meeting. A resignation must be clear and unequivocal, as the Court of Appeal confirmed in Kieran v. Ingram Micro Inc., 2004 CanLII 4852 (ON CA). An executive who says 'maybe I should just leave' has not resigned. An employer that treats those words as a resignation to avoid paying a package is taking a risk. If you are being pushed toward the door, read whether to quit with cause or wait to be let go.

How do these duties collide with my duty to mitigate?

They pull in opposite directions, and the law resolves the conflict through reasonableness. You must make reasonable efforts to find comparable work, and money you earn during the notice period generally reduces your damages. But you do not have to take a role that would put you in breach of a valid obligation, and your former employer has to prove you failed to mitigate.

Mitigation is judged objectively, by what a reasonable person in your position would do, as the Supreme Court explained in Evans v. Teamsters Local Union No. 31, 2008 SCC 20. Your position includes your fiduciary duties and any valid covenant. A court should not criticize an executive for turning down a role whose whole purpose was to bring over the accounts they used to manage. But your restrictions are not a licence to stop looking. Most executives' skills transfer to non-competing sectors, private equity portfolio companies, advisory roles, interim appointments and different client segments.

• Keep a mitigation log from the first week. Record the roles you considered, applications, recruiter conversations and interviews. For any role you turned down, write the reason, including any conflict with your obligations.
• Put any conflict in writing. If a promising role might touch your former employer's clients, have counsel describe it to the company and ask whether it objects. If the company objects, it will struggle to argue later that you should have taken the job. If it stays silent, you have more room to go ahead.
• Know what is and is not deducted. New earnings do not reduce your statutory termination and severance pay under the Employment Standards Act. They generally do reduce common law damages above that floor. Earnings from a substantially lesser job taken to keep money coming in will not necessarily be deducted; see Brake v. PJ-M2R Restaurant Inc., 2017 ONCA 402.
• Read your salary continuance terms. Many executive agreements stop or reduce payments once you start a new job. If one part of the termination provisions offends the Act, all of them fail under Waksdale v. Swegon North America Inc., 2020 ONCA 391. Machtinger v. HOJ Industries Ltd., [1992] 1 SCR 986 then restores common law notice, and the stop-on-new-job term generally falls away with the rest.
• Watch for your employer undermining your search. Warning letters to prospective employers, or accusations of disloyalty circulating in your industry, make it harder to find work. In Lin v. Ontario Teachers' Pension Plan, 2016 ONCA 619, a failed cause allegation made under an ethical cloud pushed the notice period to the top of the range because it made re-employment harder. Untruthful or misleading conduct in the way you were dismissed can also attract damages under Honda Canada Inc. v. Keays, 2008 SCC 39.

For the general rules, see the duty to mitigate your severance.

How does the notice period change what my package is worth?

Dramatically, because every part of an executive package is measured over the notice period, not just salary. The round figures below are illustrations, not a prediction for any individual. They show why the gap between a contractual offer and common law reasonable notice is often hundreds of thousands of dollars, and why a fiduciary breach during that period is so expensive.

Take a senior vice-president, age 52, with 10 years of service. Base salary is $300,000. The annual bonus target is 40% of base ($120,000), and it has paid at target for three years. The company grants $200,000 of restricted share units (RSUs) a year, vesting in equal quarterly tranches of $50,000. The employer contributes 8% of salary ($24,000 a year) to a pension plan, and replacing the group benefits would cost $12,000 a year. The employer relies on a termination clause and offers six months of base salary and benefits. It says the bonus and all unvested RSUs are forfeited. Assume the clause fails and a court sets 18 months of notice.

Now add mitigation and the fiduciary problem:

• A comparable, non-competing role at month 9. The executive joins a company outside the former employer's market at $240,000 base. Over the remaining nine months of the notice period, that is $180,000 of base salary. Deducting it from common law damages leaves about $804,000, and nobody is arguing about loyalty.
• A competitor role at month 3, pitching old accounts. The executive joins a direct competitor at $360,000 base and immediately calls the three largest clients they managed. Fifteen months at $30,000 a month is $450,000 of mitigation income, which cuts the claim to about $534,000. The former employer then counterclaims for breach of fiduciary duty, seeks an injunction and asks for the profits on any business that moved. The case becomes longer, costlier and less predictable, and the executive's conduct becomes the story.
• Salary continuance that stops on re-employment. If the termination clause is enforceable, starting any new job ends the payments. If it is not, the stop-on-new-job term generally falls with the clause, and ordinary mitigation rules apply.

Two more points about notice. First, the Bardal factors set the period, and very senior roles support the higher end. But a base notice period above 24 months requires exceptional circumstances under Lowndes v. Summit Ford Sales Ltd., 2006 CanLII 14 (ON CA). Second, shares you bought with your own money under a shareholders' agreement are a different category. In Mikelsteins v. Morrison Hershfield Limited, 2021 ONCA 155, such shares were treated as shareholder rights, valued from the termination date, rather than as compensation over the notice period. In Love v. Acuity Investment Management Inc., 2011 ONCA 130, the wording of the agreement triggered a share buy-back at the termination date. For equity in more detail, see valuing equity vesting during the notice period.

What should I look for in my own documents?

Look for three things: anything that restricts you, anything that takes money away if you compete, and anything that ends your compensation on the termination date. The restrictions decide what you can do next. The forfeiture and clawback terms decide what doing it will cost. The termination and plan wording decide what you are owed in the meantime.

What should I avoid doing in the first months after I leave?

Do not take anything, do not pitch anyone, and do not chase any deal that was in the company's pipeline until you have had advice. Most fiduciary claims against departed executives are built on documents and messages from the first few weeks, and nearly all of them could have been avoided.

• Do not keep or copy company information. Do not forward emails to a personal account, download client lists, pipeline reports, board decks or pricing models, or sync files to personal devices. Forensic reviews of departing executives' laptops look for exactly this.
• Do not wipe company devices before returning them. Deleting data looks like concealment. If company data is on a personal phone or cloud account, tell your lawyer and arrange a documented return or deletion that both sides agree to.
• Do not contact clients you managed to announce, pitch or 'catch up' until you know what your fiduciary duty and any non-solicit allow. That includes LinkedIn messages and dinners.
• Do not pursue any opportunity the company was working on when you left, even if the other side calls you, and even if you think the company would never have closed it.
• Do not recruit your former team, or tell them informally that there will be a place for them.
• Do not use the company's confidential numbers in your new role: margins, bid strategies, acquisition lists, compensation data or product roadmaps.
• Do not tell a new employer you have no restrictions. Show them your agreements and ask them to confirm in writing that the role will not require you to breach them. A business that knowingly benefits from a breach can be exposed to a claim too, so a careful employer will want to see them anyway.
• Do not start with a competitor during garden leave or working notice. You remain an employee until your employment actually ends.
• Do not sign the release or accept the package until you have checked whether it adds or reaffirms restrictions. See severance conditional on non-disparagement, confidentiality and cooperation.
• Do not stop looking for work because of your restrictions, and do not let an option exercise window lapse while you argue about the termination date.
• Do not respond publicly to allegations of disloyalty. Let counsel answer in writing.

Here is what you can do. Take calls from recruiters. Apply for roles outside the company's market. If your non-compete is void, accept a competitor role that does not require you to solicit old clients or take company opportunities. Once you have advice, announce your move in general terms. And use everything you know about how to do the job well.

What documents should I gather, and what should I ask a lawyer?

Before you respond to anything, gather every document that sets your pay, your restrictions and your equity, plus the termination letter and draft release. Then put the questions below to a lawyer. The answers decide both what your claim is worth and what you can safely do next.

Documents to gather:

• Your original offer letter or employment agreement, plus every later amendment, promotion letter and title change, with dates
• Any separate non-compete, non-solicitation, confidentiality or invention assignment agreement, with the date you signed each and your title at the time
• The equity plan text, every award or grant agreement, the vesting schedules and a current statement from the plan administrator
• Bonus plan documents for the last three years and your actual bonus history
• Pension, SERP and deferred compensation plan documents and statements
• Any shareholders' agreement, purchase agreement or rollover agreement, if you sold a business or bought shares
• The company's clawback policy, code of conduct and insider trading or blackout policy
• The termination letter, severance offer, draft release and any deadline for accepting it
• Your officer appointment documents and directors' and officers' indemnity, if you have them
• A list, written from memory for your lawyer and without using company documents, of the opportunities and client negotiations you were working on when you left

Questions to ask:

• Am I a fiduciary? If so, which clients and opportunities should I stay away from, and for how long?
• Is my non-compete void under ESA s. 67.2 given my title and the date I signed, or does the executive or sale-of-business exception apply?
• Is my non-solicit enforceable as written, or is it ambiguous or overbroad?
• Is my termination clause enforceable? If not, what notice period would a court likely set for someone in my position?
• Which parts of my bonus, equity, pension and deferred compensation are owed over the notice period, and what wording in my plans tries to cut them off?
• Would the specific role I am considering breach anything, and should we ask my former employer whether it objects?
• Does the release add or reaffirm any restriction, and what is the company paying for it?
• What should I do about company information still on my personal devices?

What should I do this week?

Protect the evidence, protect your deadlines and protect your claim. The steps below, in order, keep your fiduciary position clean while you work out what your package is really worth.

1. 1.Return company property intact, and write down, for your lawyer only, where company information may still sit on personal devices or accounts.
2. 2.Put every deadline in your calendar: the release deadline, option exercise windows, benefit conversion windows, and the two-year limitation period for a wrongful dismissal claim (see the limitation period to sue for wrongful dismissal).
3. 3.Collect the documents listed above and pull your bonus and vesting history.
4. 4.Get advice on the scope of your fiduciary duties and covenants before contacting any client, former colleague or counterparty.
5. 5.Start a mitigation log, and look first at roles that raise no conflict.
6. 6.Have the offer measured against the full value of your package over a realistic notice period before you sign anything.
7. 7.If a role might touch your former employer's business, have counsel raise it with the company in writing before you accept.

If your equity, bonus and restrictions all interact, our severance pay review looks at the documents and the numbers together.

About the Author

Daniel Carter

Legal Writer, Mirza Law

Daniel Carter is a legal writer at Mirza Law in Toronto. He writes about layoffs, employment contracts, and the steps to take before you sign anything from your employer.

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