Can an employment contract be frustrated by a disability or illness of the employee in Ontario? Hill v B&B Towing

William Muir, MA, JDCivil Litigation, Closely-Held Business Disputes, Employment, Employment & Wrongful Dismissal, Employment Dispute Arbitrator, Management Contracts, Personal Service Contracts0 Comments

The Ontario Court of Appeal has affirmed that an employee’s illness or disability will frustrate an employment contract only in circumstances where the condition is sufficiently enduring to prevent the employee from performing the essential duties of the employment within a reasonable time. Temporary limitations that can reasonably be accommodated will generally not frustrate the contract.   In Hill v 1359768 Ontario Inc. (B&B Towing), 2026 ONCA 577 (CanLii), the Ontario Court of Appeal reviewed a trial court decision involving a towing services company that was found to have constructively dismissed the employee by demoting him from the managerial position of road boss to a tow truck driver. The Court of Appeal did not find frustration of the employment contract in this case and affirmed the legal test to determine when this can occur. Legal Test: “The question is whether the employer has proven that the employee’s sickness, injury or … Read More

Confidentiality, Non-Competition and Non-Solicitation Clauses In Contracts

Sabrina Saltmarsh, B.A. (Hons), J.D.Breach of Confidentiality Clause, Breach of Non-Competition Agreement, Breach of Non-Competition Clause, Breach of Non-Solicitation Agreement, Breach of Non-Solicitation Clause, Business Disputes, Business Law, Business Litigation, Business Torts | Economic Torts, Closely-Held Business Disputes, Commercial, Commercial Contracts, Commercial List Matters, Commercial Litigation, Confidentiality Agreement, Confidentiality Clause, Corporate Litigation, Directors' and Officers' Liability, Injunction & Specific Performance, Joint Venture Disputes, Management Contracts, Mareva Injunction, Non-Compete, Non-Competition Agreement, Non-Competition Clause, Non-Solicitation Agreement, Non-Solicitation Clause, Norwich Order, Partnership Dispute, Partnerships and Shareholder Disputes, Sale of Business Disputes, Shareholder Disputes0 Comments

Confidentiality, non-competition, and non-solicitation clauses often show up in a variety of business contracts including employment and executive contracts, shareholder, and director agreements, as well as, independent contractor agreements, joint venture agreements and mergers, to name a few. A question that must be considered by contracting parties to such agreements is: What is the enforceability of these types of restrictive covenants? This question particularly becomes important when parties may part ways and a breach of the clauses is suspected or confirmed. These clauses are premised on the assumption that the relationship between the parties will result in the sharing of proprietary and sensitive business knowledge, contacts and relationships related to the operations of a business, which the company seeks to protect, particularly once the relationship between the parties ends. Non-competition clauses usually restrict one’s ability to engage in a competing business. Non-solicitation clauses prohibit one from soliciting stakeholders and contacts … Read More