The Supreme Court of British Columbia has granted an injunction against an advisor that switched investment dealers, ordering him to return client contact information to his former employer.
However, the court also ruled the advisor is permitted to contact that clients he had primary responsibility for within his former firm’s team.
In its RBC Dominion Securities Inc. v. Macdonald decision handed down last week, the court granted RBC DS an injunction it sought against former associate advisor, Lance Macdonald, and his new firm, National Bank Financial Ltd. (NBF)
According to the decision, Macdonald served as an associate investment advisor at DS’s Kelowna branch until March 22, when he resigned and went to work at NBF. While he was at DS, MacDonald worked as an assistant to a senior investment advisor, Richard Ingram; and was the primary contact and service provider for about 130 of their clients. After switching to NBF, Macdonald began soliciting Ingram’s clients.
DS sought an order requiring both Macdonald and NBF to return all documents containing information Macdonald obtained while at the DS, and an order that they refrain from initiating contact with anyone Macdonald knew to have been a DS client.
The court granted some, but not all, of the relief sought by DS. Specifically, it ordered the defendants to return all documents containing information that Macdonald obtained while working at DS except for the names of his “primary contact clients” or publicly available information obtained independent of his employment. It also enjoined Macdonald and NBF from soliciting Ingram’s clients, except for those ‘primary contact clients’.
While it found that “RBC DS will suffer irreparable harm unless an interlocutory injunction is granted regarding the use of confidential information for targeted solicitation of Mr. Ingram’s clients who are not primary contact clients.” It also found that the order it sought “would be too broad to be justifiable.”
“The evidence indicates that while the primary contact clients are included in Mr. Ingram’s internal book of business in practice it was Mr. Macdonald who served them. A personal relationship of trust and confidence may well have developed and thus they have an interest in knowing about his move so that they may choose to follow him,” it says, adding that an injunction concerning them is not warranted.
As for Ingram’s other clients, the court did conclude that an injunction is justified, saying, “They have no relationship of trust and confidence with Mr. Macdonald and no specific interest in learning of his move. They do, however, have an interest in the protection of their privacy, including their status as potential investors and their private contact particulars. In addition, RBC DS has a proprietary interest in the client list and its other client information. It also has an interest in protecting itself from undue reputational harm.”