If you hold a senior or trusted position at a company, you may owe a fiduciary duty to your employer that goes beyond what is written in your employment contract. Breaching this duty can expose you to serious legal consequences, including injunctions, damages, and disgorgement of profits. This post breaks down what fiduciary duties are, who owes them, what they require, and what happens when they are breached.
The Calgary employment lawyers at Cashion Legal advise employees in exactly this situation. We help you understand what you owe, what you are free to do, and how to make your move cleanly. Book a case evaluation today.
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Your Situation
You have spent years building something real at your company. You know the clients, you understand the business, and you have earned the trust of the people around you. But somewhere along the way, the ceiling came into view. Promotions have stalled, compensation has not kept pace, or the direction the business is heading no longer aligns with where you want to go. You are good at what you do, and you know it. It is time to move on.
Maybe you have a new employer in mind. Maybe you are thinking about starting your own business. Either way, you are not walking away from the industry you know. You plan to stay in the same space, work with similar clients, and compete for the same opportunities. And that is where the legal complications begin.
The relationships you have built matter. The clients who trust you, the contacts you have cultivated, the knowledge of what the market looks like from the inside: these are part of what makes you valuable. But depending on your role, some of what you are walking out the door with may not be entirely yours to use. If you hold a senior or trusted position, the law may classify you as a having a fiduciary duty, and that classification carries obligations that do not disappear when you hand in your resignation.
How your employment ends also matters. If your employer terminates you for cause before you have a chance to leave on your own terms, that changes the picture significantly. A termination for cause can affect your severance entitlements, but it can also be used by an employer as leverage in a fiduciary dispute, particularly if the employer alleges that your preparations to leave crossed a line. Understanding what cause actually requires is important.
None of this means you are stuck. The law does not prohibit senior employees from competing. It does not require you to stay somewhere that no longer fits. What it does require is that you understand the rules before you act, not after. An injunction, a claim for damages, or a lawsuit from your former employer is a costly and distracting way to start the next chapter of your career.
We can help: Learn about our legal services
What Is a Fiduciary?
A fiduciary is someone entrusted by another party to exercise power, control, or discretion over that party’s affairs in a way that affects their interests. The key features of a fiduciary duty are that the fiduciary holds meaningful authority, can act unilaterally in ways that affect the other party, and the other party is particularly vulnerable to how that authority is used.
In the employment context, a fiduciary duty exists where the employee has been given a level of trust and responsibility that rises above the ordinary employment relationship. When that threshold is met, the law imposes heightened obligations on the employee, regardless of whether those obligations are spelled out in any written agreement.
Courts are generally reluctant to find a fiduciary duty outside the traditional recognized categories (such as solicitor-client or trustee-beneficiary), but they have consistently recognized that the categories are not closed. Fiduciary status in employment is determined on a case-by-case basis.
Who Is Considered a Fiduciary?
Not every employee owes a fiduciary duty. Courts look at the nature of the role, not the job title. The analysis focuses on the degree of trust and autonomy the employer has placed in the employee, and the corresponding vulnerability that creates.
Directors and Officers
Directors and senior officers are automatically fiduciaries. They are per se fiduciaries, meaning no further analysis is required. They owe duties of loyalty, good faith, and avoidance of conflicts of interest to the corporation under both common law and statute.
Senior Management
Employees at the highest levels of the corporate chain, such as presidents, vice-presidents, and other members of top management, will often be fiduciaries. The focus is on whether they exercise independent power or discretion over the employer’s business and are integral to the employer’s decision-making.
Key Employees
A fiduciary duty can also attach to non-management employees whose role is so essential to the employer’s business that the employer would be particularly vulnerable upon their departure. Courts interpret this category narrowly. Relevant factors include exclusive customer relationships, access to confidential business information, and authority to make decisions that affect the employer’s competitive position.
Mere Employees
Ordinary employees who do not hold authority or discretion over the employer’s affairs are not fiduciaries. A good employee is not the same as a key employee in the legal sense. The analysis turns on the employer’s vulnerability to how the employee’s discretion is exercised, not on how valuable or competent the employee is.
Fiduciary by Terms of Your Contract
It is worth noting that a contract cannot simply declare that someone owes fiduciary duty and make it so. Courts look past labels and contractual language to assess the actual nature of the employment relationship. If the work does not carry the hallmarks of fiduciary duty, the title will not create the status. The reverse is also true: an employee who is never called a fiduciary, and whose contract says nothing about fiduciary obligations, may still be found to owe them if the circumstances of the role meet the legal test. What matters is the substance of what the employee actually does, not what their contract or job title says about them.
What Obligations Does a Fiduciary Have?
A fiduciary duty is broader than the obligations of an ordinary employee, and many of them continue even after the employment relationship ends. The specific duties that apply in any given situation depend on the nature of the role and the circumstances, but they typically include the following.
Good Faith and Loyalty
All employees owe a duty of good faith and fidelity to their employer during employment. For fiduciary employees, this duty is more demanding. It includes an obligation to act in the best interests of the employer, avoid conflicts of interest, disclose known fiduciary breaches by others, and disclose their own conflicts of interest in transactions made on the employer’s behalf.
Confidentiality
Fiduciary employees must not misuse or disclose the employer’s confidential information or trade secrets, both during and after employment. This duty continues for as long as the information remains confidential. It applies regardless of whether there is a written confidentiality agreement in place.
Non-Solicitation
Fiduciary employees cannot actively solicit the employer’s customers or employees, either during employment or for a reasonable period after employment ends. What counts as active solicitation includes targeted outreach such as personalized letters, phone calls, or emails inviting clients to follow the employee to a new business. It does not include general advertising, passively accepting business from clients who seek out the employee, or responding to clients who initiate contact first.
The length of the post-employment non-solicitation period is determined on a case-by-case basis. Courts look at factors like the seniority of the role, the nature of the business, and how the employment ended. In practice, the period typically ranges from a few months to one year.
Non-Competition
During employment, a fiduciary cannot actively compete with their employer. Planning a future competing business in your own time, without using the employer’s confidential information and without approaching clients or employees, is generally permissible, provided the fiduciary continues to perform their job duties faithfully and discloses plans to compete once those plans become concrete. After employment ends, fiduciary employees may compete, but not unfairly. Competition becomes unfair when it involves misuse of confidential information, solicitation of clients within a reasonable period, or appropriation of business opportunities belonging to the employer.
By contrast, if you have a written non-compete clause in your employment agreement, that provision operates separately from your fiduciary duty. A non-compete can restrict competition even where fiduciary status does not attach, and fiduciary duties continue to apply even where the non-compete is later found to be unenforceable. The two can co-exist, and courts assess each independently. Whether a non-compete clause is enforceable in Alberta turns on its own requirements around reasonableness of scope, duration, and geographic limits. Learn more about non-compete clauses here.
Corporate Opportunities
A fiduciary cannot divert to themselves, or to another person, a business opportunity that the employer was actively pursuing. This applies both during employment and for a reasonable period after. The fiduciary duty is particularly strict where the employee’s position at the company is what created the opportunity, or where the fiduciary’s resignation was motivated by a desire to capture the opportunity for themselves.
What Are the Consequences of Breaching Fiduciary Duties?
A breach of fiduciary duty is a serious matter. It attracts equitable remedies that go beyond what is available for ordinary breach of contract. The consequences may include one or more of the following.
- Termination for Cause. If your employer learns about your efforts to compete while you are still an employee, an employer may respond by termination for just cause. Termination for cause means that your employment is terminated without any severance. Learn more about termination for cause here.
- Injunctions. Courts can issue interim or permanent injunctions requiring the former employee to stop soliciting clients, stop competing, or return confidential information. In Alberta, courts have granted injunctions against former employees for periods of up to twelve months or longer, particularly where an egregious breach has already occurred. See Easyhome Ltd. v. Casey, 2009 ABQB 735 as an example of how seriously Alberta courts treat these situations.
- Damages. The employer can recover losses flowing from the breach, including lost profits, loss on sales, and increased costs caused by the former employee’s conduct. The employer is not entitled to recover the salary already paid to the employee.
- Disgorgement of profits. Courts can require the fiduciary to account for and pay over any profits they earned as a result of the breach. This applies even where the employer’s losses are difficult to quantify.
- Liability extending to the new employer. If the new employer knowingly assists or participates in the breach of fiduciary duty, it can also be held liable. Recklessness or willful blindness is sufficient. A new employer that does nothing to inquire about an incoming senior employee’s post-employment obligations may find itself jointly liable for any breach.
How One Regional Manager’s Exit Became an Injunction
The Alberta court case of Easyhome Ltd. v. Casey, 2009 ABQB 735 shows how a enforcement of a fiduciary duty operates in practice.
A regional manager for a national lease-to-own company resigned and was discovered several months later working for a direct competitor, operating a store approximately 200 metres from one of his former employer’s locations. The former employer obtained forensic evidence from the employee’s work laptop showing that customer lists had been copied and that files had been deleted in an apparent attempt to conceal the activity. Former customers reported receiving targeted direct mail from the new employer and expressed confusion about how their personal contact information had been obtained. There was also evidence that the employee had approached at least five of his former employer’s staff with offers of employment at the competing business.
The Alberta Court of Queen’s Bench granted an injunction restraining the former employee from engaging in marketing activities in the region for twelve months from the date his employment ended. The court found a strong prima facie case that the employee was a key employee and a fiduciary, given the scope of his responsibilities, his autonomy over regional operations, his access to confidential pricing and customer information, and his knowledge of which employees might be receptive to competing offers.
The court also addressed the duration of the injunction. The employee argued that the six-month non-compete clause in his employment agreement should set the ceiling. The court disagreed, finding that the restrictive covenant had been negotiated on the assumption that the employee would not misappropriate confidential information. Where a breach has already occurred, the court has latitude to extend the period beyond what the contract would otherwise require, to allow the former employer a meaningful opportunity to recover from the harm caused.
When a Manager Did Not Owe a Fiduciary Duty
Conversly, another Alberta court decision in 1731271 Alberta Inc v Reimer, 2024 ABKB 446 shows that not every employee will owe a fiduciary duty.
A small printing company sought an injunction against a former employee and her new employer after she left and began working for a competitor in the same industry. The former employer alleged she was a key employee and fiduciary who had solicited its clients and misappropriated confidential information.
The employee had worked in the printing industry her entire career. At the company in question, her core responsibilities included scheduling, planning, estimating, purchasing supplies, and managing existing client relationships. She was well-regarded, knowledgeable, and had developed strong relationships with clients over many years. Her employer had placed her name and photo on a corporate website describing her as a general manager and part of a leadership team, though she had no knowledge of this and had never been given that title in any formal way.
The Alberta Court of King’s Bench dismissed the application. The Court found that the former employer had not established a strong prima facie case that she was a key employee. The court drew a clear distinction between a valuable employee and a fiduciary employee. The employee was excellent at her job and trusted by clients. But being good at your job, even indispensable in a practical sense, is not the same as having the kind of independent authority and discretion over the employer’s operations that grounds a fiduciary duty.
Several factors pointed away from key employee status. She carried out tasks as instructed by management rather than exercising independent judgment that could affect the company’s legal or practical interests. When she raised concerns about the direction of the business, she was ignored. Her replacement was trained in four days, entirely over email and phone, while she was in another city. There was no employment contract, no job description, and no performance reviews on record.
The injunction was dismissed in its entirety.
What Can I Do If I Want to Leave and Compete?
If you owe a fiduciary duty and want to leave your employer and move into competition, you do have options. The key is understanding what the law permits and proceeding carefully.
You are generally entitled to take your skills, knowledge, and general experience with you. The law does not prevent fiduciary employees from competing after employment ends. What it prohibits is competing unfairly, which means using confidential information, soliciting clients or employees within a reasonable post-employment period, or capturing business opportunities you learned about through your fiduciary role.
Planning during your current employment is permitted, provided you do not use company resources or confidential information, conduct your planning outside of work hours and away from company premises, continue to perform your job faithfully, and disclose your plans to compete once they become concrete enough that your employer would consider them relevant to the employment relationship.
The circumstances of your departure matter significantly. A fiduciary who is wrongfully dismissed, or who is constructively dismissed, may be relieved of some or all post-employment fiduciary duty. If your employer has breached the employment contract in a material way, that context is legally relevant to the scope of any continuing duties you owe.
If you have a written non-compete or non-solicitation agreement, that agreement will need to be assessed on its own terms, but it does not replace or eliminate the fiduciary duty. These obligations can co-exist.
Before making a move, getting legal advice is essential. The line between permissible competition and a breach of fiduciary duty is not always obvious, and the consequences of crossing it can be significant.
How Cashion Legal Can Help
If you are a senior employee navigating a potential departure, the legal landscape can feel overwhelming. The obligations are real, the stakes are high, and the line between what you are permitted to do and what could expose you to litigation is not always obvious from the outside.
Cashion Legal has worked with fiduciary employees at every stage of this process. Here is what that looks like in practice.
Clarity on your obligations. Before you make any move, you need to understand exactly where you stand. We review your employment agreement, assess whether a fiduciary duty is likely to attach to your role, and explain what your fiduciary duty actually means under Alberta law. Many employees come to us assuming the worst, and leave with a clearer and more accurate picture of what they owe and what they are free to do. Others come in assuming they have nothing to worry about and benefit from understanding the real risks before they act on that assumption.
A strategy that gets you where you want to go. Understanding your fiduciary duty is only part of the equation. The more important question is how you pursue your goals within those boundaries. Whether you are moving to a new employer, launching your own business, or simply exploring your options, we help you build a plan that protects the relationships you have built, avoids triggering a claim, and gives you the best possible footing for what comes next. Clarity without strategy is not enough. We provide both.
Peace of mind throughout the process. Departures involving a fiduciary duty rarely resolve themselves in a single conversation. Questions come up. Former employers send letters. New employers ask for assurances. Having a lawyer in your corner who understands your situation means you are not navigating those moments alone. We are available to consult as things develop, and where the situation calls for it, we advocate directly on your behalf.
Speak With an Employment Lawyer
Whether you are an employer trying to protect your business from a departing senior employee, or an employee navigating a transition that involves potential fiduciary obligations, these situations carry real legal risk. At Cashion Legal, we advise both employers and employees on fiduciary duties, restrictive covenants, and employment transitions throughout Alberta. Learn more about how we can help on our employer services page or our employee services page, or contact us directly to discuss your situation.
Speak with an employment lawyer
Frequently Asked Questions About Fiduciary Duty
Do I automatically owe a fiduciary duty because of my job title?
No. Courts look past titles entirely. A contract that calls you a general manager, a vice-president, or even a fiduciary does not make you one in the legal sense. What matters is the substance of your role: whether you exercise independent discretion or authority over your employer’s operations in a way that makes the employer genuinely vulnerable to how you use that power. A recent Alberta decision dismissed a fiduciary claim against an employee whose employer had listed her on their website as a member of the leadership team. The court found that the label meant nothing without the substance to support it.
I signed a non-compete agreement. Does that mean fiduciary duties do not apply to me?
Not necessarily. A non-compete clause and a fiduciary duty are separate legal concepts that can co-exist. If you owe a fiduciary duty, this applies regardless of whether the non-compete is enforceable. Conversely, a valid non-compete can bind a non-fiduciary employee to post-employment restrictions that fiduciary law would not otherwise impose. Having one does not cancel out the other.
Can I plan my next move while I am still employed?
Yes, within limits. When subject to a fiduciary duty, planning a competing business or exploring new employment on your own time, without using your employer’s confidential information and without approaching clients or employees, is generally permitted. The moment planning crosses into active preparation that affects your employer’s interests, such as using company resources, diverting opportunities, or approaching clients before you resign, you are in breach. Once your plans become concrete enough that a reasonable employer would consider them relevant, you also have an obligation to disclose them.
Can I contact my former clients after I leave?
It depends on whether you owe a fiduciary duty. A non-fiduciary employee can contact former clients immediately after leaving, provided they do not use confidential information to do so. A fiduciary employee cannot actively solicit former clients for a reasonable period after departure. That period is determined on the facts, but typically falls somewhere between a few months and one year. Passively accepting business from a client who seeks you out is different from solicitation and is generally permitted.
What counts as solicitation?
Active solicitation means taking steps to contact former clients with the purpose of enticing them to stop doing business with your former employer. Sending targeted emails inviting clients to follow you, making phone calls to former accounts, or having someone else do it on your behalf all constitute solicitation. Sending a general announcement about your new role, responding to clients who reach out to you first, or winning business through an open bidding process generally does not.
What if my employer wrongfully dismissed me before I had a chance to resign?
A wrongful dismissal can affect the scope of your post-employment fiduciary duty. Where an employer terminates an employee without cause and without providing reasonable notice, courts have found that the employee may be relieved of some or all continuing fiduciary duties. The reasoning is that the employer cannot benefit from the protections of a fiduciary duty while simultaneously breaching the employment contract. The extent to which fiduciary duties are reduced will depend on the specific circumstances of the termination.
Can my new employer be held liable for my breach?
Yes. If a new employer knowingly assists or participates in a breach of fiduciary duty, it can be held jointly liable. Actual knowledge of the breach is required, but courts have found that recklessness or willful blindness is enough. A new employer that makes no effort to understand an incoming employee’s post-employment obligations takes on that risk. New employers in this situation are well-advised to make reasonable inquiries before proceeding.
What can my former employer actually do if they believe I have breached my duties?
A former employer can seek an injunction to stop the conduct immediately, claim damages for losses flowing from the breach, and demand that you account for and pay over any profits earned as a result of the breach. They can also pursue your new employer if it participated in the breach. In serious cases, courts have also awarded punitive damages. Acting quickly matters on both sides: employers who delay in seeking injunctive relief can undermine their own case.
Should I get legal advice before I resign?
Yes. The time to understand your obligations is before you act, not after a cease-and-desist letter arrives. Getting advice early allows you to plan your departure in a way that protects your interests, reduces your exposure, and gives you confidence in the decisions you are making. Cashion Legal works with employees in exactly this situation.