Executive Summary: Key Legal and Evidentiary Issues

• Dispute over whether former insurance brokers and their new employer unlawfully solicited or served BFL’s clients after resignation, in the absence of clear, valid non-competition and non-solicitation clauses.
• Contested validity, scope and clarity of a heavily redacted shareholder agreement clause on confidentiality, non-solicitation and non-competition, including its territorial reach across Canada and its vague drafting.
• Examination of BFL’s legal interest to sue, relying on an “alter ego” theory between BFL and its holding company FLH to establish standing to seek injunctive relief.
• Assessment of whether any contractual or extra-contractual fault occurred, versus lawful competition and client choice, given that the clients themselves approached the former brokers at Synex.
• Consideration of whether the loss of a small number of clients amounted to serious or irreparable harm justifying a provisional interlocutory injunction.
• Balancing of inconveniences between preventing former employees and Synex from dealing with a broad class of clients and potential clients, and the relatively limited, unquantified client losses alleged by BFL.

Background and parties

BFL Canada Services de risques et assurances inc. (BFL) is an insurance brokerage providing damage insurance brokerage services to business clients in Quebec. Patrick Bolduc was a damage insurance broker and a shareholder of First Lion Holdings Inc. (FLH), which in turn is the sole shareholder and holding company of BFL. Marie-Hélène Gauthier was also a damage insurance broker employed by BFL. Both had direct contact with BFL’s clients and were involved in servicing those accounts. On 20 June 2025, Bolduc and Gauthier each sent notices to BFL advising that they were resigning, effective 4 July 2025. After leaving, they joined two related companies operating under the Synex Assurance branding: 15484880 Canada Inc. (Synex Assurance) and 9484-0857 Québec Inc. (Synex Assurance / Couture Rochette Gestion de risques). These Synex entities are also insurance brokerages that compete with BFL in the commercial insurance market.

Events following the resignations

In early August 2025, shortly after Bolduc and Gauthier had taken up employment with Synex, BFL learned that three of its client companies had transferred their insurance business from BFL to Synex. A few days later, BFL became aware of another client moving its account to Synex. In each case, the relevant clients had been serviced by Bolduc at BFL, and they chose to continue dealing with him at his new firm. Concerned that this movement of business reflected improper solicitation or servicing of its clientele by its former employees and their new employer, BFL sent a demand letter to Bolduc, Gauthier and Synex on 14 August 2025. Shortly afterwards, on 26 August 2025, BFL instituted proceedings that included a demand for a provisional interlocutory injunction aimed at stopping what it claimed was an ongoing and harmful diversion of its clientele.

The injunctive relief sought

BFL sought a provisional interlocutory injunction against Bolduc, Gauthier and the Synex entities. The core of the requested order was to prohibit them from soliciting or doing business with current or potential clients of BFL. BFL argued that the defendants’ conduct constituted breaches of contractual obligations of non-competition, non-solicitation and confidentiality, as well as extra-contractual (civil) faults under Quebec law. It also claimed that the situation was urgent, that there was an appearance of right based on contractual and statutory obligations, that it faced serious or irreparable harm through loss of clientele, and that the balance of convenience favoured its position because it risked losing important business relationships.

Procedural and legal framework for provisional injunctions

The Superior Court analysed the request under the Civil Code of Procedure provisions governing provisional interlocutory injunctions. The Court recalled that such relief is exceptional and requires satisfaction of four cumulative criteria: urgency; appearance of right or the existence of a serious question to be tried; serious or irreparable harm; and a balance of inconvenience favouring the granting of relief. At the provisional stage, these criteria are applied with particular stringency: when in doubt, courts are encouraged to refuse provisional injunctive relief because it is discretionary and can significantly disrupt the status quo before a full hearing on the merits.

Urgency

On the question of urgency, the Court accepted that BFL had acted within a reasonable time after becoming aware of the loss of its clients. The key dates were that BFL learned of the first three client transfers on 4 August 2025, issued a demand letter on 14 August 2025, then discovered another transfer on 21 August 2025 and filed its originating application, including the request for a provisional injunction, on 26 August 2025. The Court held that moving within less than 30 days from the first awareness of the client loss generally qualifies as a reasonable delay when seeking provisional injunctive relief, especially where the harm alleged is ongoing loss of clientele rather than the original departure of employees. On this first criterion, the Court was satisfied that urgency was shown.

BFL’s legal interest and the alter ego theory

The defendants argued that BFL lacked the necessary legal interest to bring the application, contending that only FLH, as party to the unanimous shareholder agreement, could sue on the clause in question. The Court rejected this preliminary objection at the provisional stage. It accepted that FLH is the sole shareholder and holding company of BFL, and that BFL can be treated as the “alter ego” of FLH for the purposes of establishing standing. The Court drew on the legal principle that where one company is under the control of another and their interests are sufficiently aligned, the controlled company can be recognised as having a sufficient juridical interest to seek relief based on the parent’s rights. Accordingly, the Court found that BFL did have the necessary legal interest to request a provisional interlocutory injunction, and it declined to give weight to any technical argument about amending the pleadings to add FLH.

Employment relationship and absence of proven non-competition clauses

The Court then reviewed the contractual framework governing Bolduc and Gauthier’s obligations as former employees. Under Quebec civil law, employees owe duties of loyalty, honesty and confidentiality to their employer; these obligations survive the end of the employment relationship but are interpreted restrictively. Absent a valid non-competition clause, a former employee is free to compete with his or her former employer, so long as the competition is conducted fairly and in good faith and without misuse of confidential information. In Bolduc’s case, BFL had produced his employment offer and his letter of termination, both of which referred to a confidentiality agreement and to obligations of non-competition and non-solicitation. However, BFL did not produce the underlying employment contract or the actual text of any non-competition clause that Bolduc supposedly signed. At the hearing, BFL effectively acknowledged that its case on appearance of right, at the provisional stage, rested primarily on the clause contained in the unanimous shareholder agreement, not on a stand-alone employment non-compete. As for Gauthier, BFL produced her employment offer and a confidentiality agreement, but nothing evidencing any non-competition or non-solicitation clause binding her after her departure. The Court noted that Synex itself was not party to any confidentiality, non-competition or non-solicitation obligations toward BFL.

Conduct of the defendants and absence of fault

The Court examined the factual record concerning the behaviour of Bolduc, Gauthier and Synex around the time of their departure and the transfer of clients. It concluded that there was no evidence of disloyal conduct by either Bolduc or Gauthier toward BFL before or after their resignation. Their professional transition appeared reasonable, and there was no proof that they had used confidential information from BFL to actively solicit clients. The clients in question took the initiative themselves to locate Bolduc and to request that he continue to handle their insurance business at Synex. Similarly, the Court found no basis to conclude that Synex had committed any extra-contractual fault, such as inciting, assisting or participating in a breach of non-competition or non-solicitation obligations (assuming such obligations even existed). On the record before it, the Court saw the situation as one of legitimate competition influenced by client preference rather than wrongful solicitation.

The shareholder agreement clause on non-solicitation and non-competition

Central to BFL’s argument was clause 17 of the third amended and restated unanimous shareholder agreement of FLH, signed by Bolduc. This clause, entitled “Engagements de confidentialité, de non-sollicitation et de non-concurrence”, addressed confidentiality, non-solicitation and non-competition obligations applicable to shareholders. The version filed was heavily redacted, but the parties agreed that this clause formed the contractual basis for BFL’s request to prevent Bolduc from dealing with its clients. At the provisional stage, the Court emphasised that its task was not to undertake a full interpretive exercise of the clause but to assess whether there was at least a prima facie valid clause and apparent breach sufficient to support an appearance of right. However, the Court also noted that clearly unlawful or unreasonable aspects can be identified on the face of a clause even at this preliminary step.

Territorial scope

The Court found that the territorial scope of the clause extended across all of Canada, whereas BFL’s commercial activities were mainly carried out in Quebec. In the Court’s view, such a Canada-wide restriction was unreasonably broad and went beyond what was necessary to protect BFL’s legitimate economic interests. This excessive geographical reach counted heavily against the validity of the clause at first sight.

Definition of “client potentiel” (potential client)

The clause also contained an expansive definition of “client potentiel”. It covered: (i) any person solicited by the shareholder or its representative on behalf of the company or its affiliates at any time during the twelve months before the shareholder ceased to be a shareholder, for any purposes related to the business; and (ii) any person solicited by the company or its affiliates, to the shareholder’s knowledge, for any business-related purpose during the six months before the shareholder ceased to be a shareholder. The Court described this definition as inequitable and unreasonable in the highly competitive field of damage insurance. The idea that a single call or approach to a prospective client could effectively reserve that client to BFL, so as to prohibit a competitor or former employee from later soliciting them, was considered an undue restriction on the fundamental principle of freedom of competition. A “potential client” so defined did not, in the Court’s eyes, “belong” to BFL in a way that could justify such a sweeping restraint.

Duration and calculation of the restriction

Although the clause stipulated a two-year duration, which in itself is not necessarily unreasonable, the Court took issue with how that duration was effectively calculated in practice. Based on the documents, it appeared that the sale of Bolduc’s shares might occur over a period exceeding two years or at a price significantly lower than their real value depending on the outcome of litigation. This structure suggested that, in reality, the obligations under the clause could be of indeterminate length. The potential for an undefined or substantially extended period of restriction further undermined the apparent validity of the clause at the provisional stage.

Imprecise drafting of the prohibited activities

The Court highlighted significant drafting problems with the description of prohibited activities in the clause. It required the shareholder, both while a shareholder and for two years thereafter, throughout Canada, to abstain from “soliciter, obtenir, fournir ou accepter des services ou produits provenant de tout client ou client potentiel” of the company or its affiliates, or from assisting anyone in such solicitation or provision where this would be in competition with the company’s activities. When stripped of verbs and terms not really at issue in this case, the operative part essentially read that the shareholder must refrain from soliciting or providing services or products “provenant de tout client ou client potentiel” of the company. The phrase “provenant de tout client ou client potentiel” was criticised as illogical, since services and products do not “come from” clients; rather, the brokerage provides services to clients. This confusion made it unclear exactly what conduct was being restricted. The Court underscored that it is not the role of the court to rewrite an inequitable, unreasonable and imprecise clause in order to save it. Taken together, the overbroad territory, the very wide and restrictive definition of potential clients, the problematic duration mechanism and the unclear wording of the prohibited activities led the Court to find that the prima facie strength of BFL’s position on this clause was “among the weakest”.

Appearance of right

Considering the absence of a proven, valid employment non-competition clause for either Bolduc or Gauthier, the lack of evidence of disloyal conduct or misuse of confidential information, the absence of any binding restraints on Synex, and the serious doubts about the enforceability of the shareholder agreement clause, the Court concluded that BFL had not established a sufficiently robust appearance of right. While some obligations of loyalty and confidentiality survive the end of the employment relationship, those obligations are interpreted strictly and do not, by themselves, prevent fair competition. Given the weak contractual foundation and the evidence that clients had moved on their own initiative, the Court was not persuaded that there was a serious question justifying provisional injunctive intervention.

Serious or irreparable harm

On the third criterion, serious or irreparable harm, the Court recognised that loss of clients can constitute serious or even irreparable prejudice for a business. The clientele of a company is one of its most important intangible assets, and once clients have shifted their relationships, it can be difficult to restore them through a later judgment. Although BFL had not proven the precise value of the contracts it claimed to have lost, the Court accepted that, in principle, the loss of these clients could amount to serious harm. On this factor alone, BFL’s position was relatively strong.

Balance of inconveniences

The decisive issue became the balance of inconveniences. BFL argued that if the provisional injunction were refused, it would plainly suffer the greater prejudice because it risked ongoing loss of clients. The Court disagreed. It noted that BFL had not quantified the value of the lost contracts, making it difficult to measure the actual impact. Moreover, the small number of clients involved appeared to have independently chosen to follow Bolduc to Synex, without any proven solicitation. On the record, it looked like a limited number of clients who simply appreciated Bolduc’s services and decided they wished to continue being served by him in his new setting, rather than the beginning of a large-scale exodus. There was nothing in the evidence to suggest that the prejudice to BFL would expand dramatically in the short term if no provisional order were granted. By contrast, the orders sought by BFL would have had a broad impact on the defendants, preventing them from soliciting or doing business with an extensive class of clients and potential clients over a wide territory. Such restraints would significantly curtail their ability to carry on their trade and commercial activities. Weighing these competing impacts, the Court concluded that the balance of inconveniences clearly favoured the defendants.

Outcome and relief ordered

Having evaluated all four criteria, the Court found that although urgency and serious harm were present to some degree, BFL had not shown a sufficiently strong appearance of right and the balance of inconveniences pointed against granting the exceptional remedy of a provisional interlocutory injunction. The Court therefore dismissed BFL’s application for a provisional interlocutory injunction in its entirety. The successful parties in this decision were the defendants: Patrick Bolduc, Marie-Hélène Gauthier, 15484880 Canada Inc. (Synex Assurance) and 9484-0857 Québec Inc. (Synex Assurance / Couture Rochette Gestion de risques). The Court ordered judicial costs against BFL, but the decision does not specify any particular monetary amount for those costs or any damages, so the total monetary award in favour of the successful parties cannot be determined from this judgment.