- Titus Steel Company Limited v. Hack, 2025 ONCA 693 (CanLII)
Ontario Court of Appeal affirms that not every senior employee is a fiduciary.
Background
Titus Steel Company Limited, a family-owned business specializing in ballistic steel, employed Wayne Hack for over a decade, first as Director of Sales and later as Vice-President of its Dynamic Steel Division. Over time, tensions grew between Hack and the company’s leadership. In early 2016, he resigned and launched his own company, Progressive Armor, which also sold ballistic steel products.
Soon after his departure, Titus discovered that Hack had copied and backed up company files before leaving. Although Hack returned the files when asked, Titus sued him, alleging he had:
- Breached fiduciary duties owed to the company;
- Breached employment duties of loyalty and good faith; and
- Engaged in willful misconduct related to certain client transactions.
Trial Decision (2024 ONSC 3666)
The trial judge found that while Hack had taken company records, his actions did not cause financial harm to Titus. She made several key findings:
- No Fiduciary Relationship:
- Hack was a senior salesperson, but not part of the company’s inner decision-making circle. Titus was not “vulnerable” to him in the way required to establish fiduciary status.
- Limited Breach of Duty:
- Hack breached his duty of good faith and loyalty by taking business documents, but this did not result in proven damages.
- No Breach of Confidence:
- Although Hack retained over a thousand business records, Titus failed to show that he misused them or caused a loss.
- No Misconduct in Client Deals:
- There was no evidence of willful misconduct or negligence regarding client transactions with CMC and Bemex.
The court dismissed the claim and ordered Titus to pay $161,264 in costs to Hack and his companies.
Court of Appeal Decision (2025 ONCA 693)
Titus appealed, arguing that the trial judge’s credibility assessments were inconsistent and that her reasons were inadequate. The Court of Appeal dismissed the appeal, holding that:
- The trial judge’s findings were supported by the evidence;
- Her reasoning allowed for meaningful appellate review; and
- There was no reversible error in her application of the law.
The Court confirmed that the trial judge was entitled to weigh credibility and that not every senior employee automatically owes fiduciary duties. The appeal was dismissed, and Titus was ordered to pay an additional $20,000 in costs.
Key Takeaways for Employers
🔹 Not all senior employees are fiduciaries.|
A fiduciary duty arises only where the employee has significant power, discretion, and the employer is particularly vulnerable to misuse of that power, such as executives who control key decisions or strategic information.
🔹 Confidentiality vs. Damages.
Even when confidential information is mishandled, courts require proof of actual harm (like lost clients or profits) before awarding damages.
🔹 Exit Protocols Matter.
Employers should have clear off-boarding processes to recover data, disable access, and remind departing employees of their confidentiality obligations.
🔹 Documentation is critical.
Titus’ failure to demonstrate concrete losses highlights the importance of retaining evidence that connects any misuse of information to specific business harm.
Why This Case Matters
This decision reinforces the distinction between fiduciary duties and the general duties of loyalty that all employees owe. Employers should not assume that seniority alone creates fiduciary obligations; they must assess the employee’s actual authority and control.
Source: 2025 ONCA 693 (CanLII) | Titus Steel Company Limited v. Hack | CanLII
