By CHRISTINE DOBBY
Friday, October 12, 2018
A Vancouver judge has ruled against Telus Corp.'s bid to immediately stop a former executive with the telecommunications company from keeping a more senior role at Rogers Communications Inc.'s media business.
Justice Robert Sewell of the British Columbia Supreme Court ruled Wednesday on Telus's request for an injunction to block Dan Golberg, who was previously vice-president of corporate development at Telus, from continuing in his new job as senior vice-president of media strategy with Rogers. He began working at Rogers in mid-September.
The application turned on the issue of a non-compete clause that Mr.
Golberg signed in 2005 as part of his employment agreement with Telus.
The judge ruled that the clause was "overly broad" and that Telus had not established a "substantial likelihood that they will succeed at trial."
"In my view, the restrictive covenant [non-compete clause] is the product of overzealous drafting by Telus's solicitors. The entire focus of the covenant appears to be directed to making it as broad as possible," Justice Sewell stated in court.
He was critical of a "blanket prohibition" against taking a job with any competitor of Telus or its subsidiaries, "regardless of whether the new position had any relationship to the duties and knowledge that the employee had while employed by [Telus]."
Mr. Golberg's employment contract says he will work solely for Rogers Media until October, 2019, when the clause expires, at which point he will take on a broader corporate-development role. The judge accepted evidence from Rogers Media president Rick Brace that his division's business is creating entertainment, not telecommunications. Telus, which does not have a media division, is focused on communications services, including wireless, home internet and television.
However, Justice Sewell also criticized Mr. Golberg for how he handled his departure from Telus, in particular the fact that he asked for a severance package while he was negotiating his new employment with Rogers.
"I find Mr. Golberg's comments about wanting a few months to focus completely on family before thinking about the next stage of his career to be disingenuous," the judge said of an e-mail Mr. Golberg sent to a senior Telus executive on Aug. 8, just a few weeks before announcing his plan to leave for Rogers.
The judge said that Mr. Golberg owed a fiduciary duty to Telus, noting that he sat in on high-level strategy meetings at Telus, including a mock auction to prepare for a coming public auction of spectrum, the airwaves used to build cellular networks.
Justice Sewell said that Mr. Golberg breached his duty to Telus by not providing "frank and full disclosure about his employment situation."
"Notwithstanding this finding, however, I do not regard his conduct as disqualifying him from being able to pursue his career. In the absence of a binding noncompetition agreement, a former fiduciary is entitled to compete with his former employer as long as he does so fairly," the judge said, adding that he did not believe Mr.
Golberg's breaches of fiduciary duty amounted to unfair competition.
Justice Sewell concluded that he would not grant an injunction barring Mr.
Golberg from working at Rogers, but said he would consider a new application by Telus for a separate injunction that would prevent its former employee from disclosing confidential information or engaging in unfair competition.
"These are obligations Mr. Golberg is under in any event. However, given his conduct with respect to the circumstances of his attempting to negotiate a severance package, in my view, an application for an injunction may well be in order."
Telus spokeswoman Jacinthe Beaulieu said the company was pleased with the court's ruling that Mr. Golberg breached his fiduciary duty. "We intend to apply for an injunction, as invited by the court, to prevent him from disclosing Telus's confidential information," she said.
The judge said he didn't agree that Telus had made a "strong case" to enforce the non-compete clause.
However, Ms. Beaulieu said Telus "will pursue our claim to a final determination."
Rogers Media's Mr.
Brace said in an e-mailed statement that he was pleased the application for an order barring Mr. Golberg from working at Rogers was dismissed, adding, "Dan will help to drive growth and strengthen our media business and sports offerings, and we have clear protocols in place to ensure he meets his obligations to his former employer."
Later, Mr. Brace said: "Dan has no concerns if Telus seeks a court order requiring him to keep Telus information confidential as he is doing this anyway."
Mr. Golberg declined to comment.
With reports from David Ebner in Vancouver