Injunctions Against Former Employees – Why Speed And Specificity Are Critical!

In Quality Chain Canada Ltd. v Xu, 2026 BCSC 424, the Supreme Court of British Columbia (the "Court") dismissed an interlocutory injunction application brought by Quality Chain Canada Ltd. ("Quality Chain") against three former senior employees and their new business. The Court's decision turned on two key failings: Quality Chain waited too long to seek injunctive relief, and it failed to identify with sufficient specificity the alleged "confidential information" it sought to protect.

Factual Background

Quality Chain is a wholesale retailer that sources and sells truck accessories, including tire chains and traction devices, to customers across Canada.

During their employment, Quality Chain's Chief Financial Officer, Director of Supply Chain and Logistics, and Director of Sales (together, the "Individual Defendants") engaged in negotiations and due diligence with the objective of purchasing Quality Chain themselves, but that objective was not achieved, and Quality Chain was acquired by different owners.

In the Spring of 2024, the Individual Defendants all resigned – two together, and the third four weeks later. Only the Director of Sales had a written employment contract that included confidentiality and non‑solicitation provisions. The non‑solicitation clause prohibited customer solicitation for twelve months following the termination of his employment.

Following their resignations, the Individual Defendants formed a new company, Dragonlink Sourcing Ltd. ("Dragonlink"). There was evidence that, in operating Dragonlink, the Individual Defendants competed with Quality Chain, solicited its customers, and made use of information alleged to be confidential to Quality Chain.

Specifically, the evidence showed that the Director of Sales breached his non‑solicitation covenant by contacting a Quality Chain customer within two months of his resignation to discuss Dragonlink and the products it intended to sell, including products that are also sold by Quality Chain. There was also evidence that, during their employment, the Chief Financial Officer and Director of Supply Chain and Logistics connected external drives to their Quality Chain computers, deleted data, created an unauthorized mirror of Quality Chain's server on a separate drive, and sent confidential information relating to Quality Chain's suppliers and prospective suppliers to personal email accounts associated with Dragonlink.

The Civil Action

Quality Chain commenced a civil action against the Individual Defendants and Dragonlink in September 2025.

It then filed an interlocutory injunction application in January 2026, with the hearing scheduled for February 26, 2026. In its application, Quality Chain sought orders restraining the Individual Defendants from soliciting its vendors, suppliers, customers, employees, and distributors, as well as from competing with Quality Chain. It also sought orders requiring the destruction and prohibition of use of Quality Chain's confidential information by the Individual Defendants and any entities they owned or controlled, including Dragonlink.

The Decision

The Court dismissed the application and refused to grant the relief sought by Quality Chain for two primary reasons.

First, the Court found that Quality Chain waited too long to seek injunctive relief relating to solicitation and competition. By the time the application was brought, the Director of Sales' twelve‑month contractual non‑solicitation period had already expired. Even for fiduciary employees, any post‑employment obligation not to solicit or compete is limited to a reasonable period, which the Court indicated would be approximately twelve months in the circumstances.

Quality Chain did not commence its action until approximately sixteen months after the Individual Defendants' resignations, and the injunction application was not heard until roughly twenty months post‑resignation. Although Quality Chain argued that the Court should extend the post‑employment obligations because there was evidence the Individual Defendants breached their duties during the period when those duties applied, the Court rejected this submission. In light of the delay, the Court concluded that imposing interlocutory restraints at this stage would not be in the interests of justice.

Second, the Court declined to order the destruction of, or prohibit the use of, Quality Chain's confidential information because Quality Chain failed to identify the "confidential information" with reasonable specificity. Broad, generic references to categories such as operations, finances, customers, employees, supplier identities, IT systems, trade secrets, product information, intellectual property, and lists with part numbers were insufficient to support injunctive relief.

The Court emphasized that, to enjoin the use of confidential or proprietary information, a plaintiff must clearly define the specific information at issue. This level of specificity is necessary to allow a defendant to meaningfully respond, including by assessing whether the information is truly confidential or instead publicly available. It also ensures that defendants are on notice of what conduct is prohibited and allows the Court to effectively assess and enforce compliance with any resulting order.

Practical Takeaways

This decision highlights two essential requirements for interlocutory relief in employment disputes: speed and specificity. Employers must act promptly if they want the Court to grant injunctive relief against a former employee, and they must define alleged confidential information with precision if they seek to protect it or compel its return. Notably, the Court in this decision indicated that it would have been prepared to consider a narrowly tailored non‑solicitation injunction had Quality Chain sought relief within approximately twelve months of the resignations. That opportunity was lost due to the passage of time.

It is noteworthy that Quality Chain was likely in the dark about the defendants' activities for some time after their resignations, which is not uncommon in such cases; however, this makes it all the more important for employers to take prompt action when they learn about contractual breaches (or potential breaches).

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