Lessons from Garbage King Inc. v Voth, 2025 ABKB 661
The Background – A Classic Small-Business Break-Up
- Garbage King Inc. was a start-up Calgary waste-management company launched in January 2022.
- Heather Saunders (President) provided the capital; Brad Voth brought industry experience, an existing client base, and was the day-to-day “face” of the business.
- No written partnership, employment, or shareholders’ agreement was ever signed. No non-competition or non-solicitation clause existed.
- Voth was referred to (and held himself out) as “Managing Director” and then “Managing Partner.” Corporate filings listed him as a director, although formalities were sloppy.
- In January 2023, the relationship collapsed. Voth claims he was constructively dismissed; Garbage King says he quit. Within weeks, almost all of Garbage King’s customers moved to a new competitor, VP Disposal, where Voth became Vice-President.
- Garbage King lost approximately 90% of its revenue and sued for breach of fiduciary duty and misuse of confidential information (client lists, pricing, unique customer needs).
The Injunction Application – What Garbage King Wanted
Two and a half years after Voth left, Garbage King sought an interlocutory injunction to stop Voth and VP Disposal from:
- Using its confidential information; and
- Doing any work at all for its former clients (effectively a backdoor non-compete).
The Court’s Decision – Injunction Denied
Justice C.M. Jones dismissed the application in its entirety (2025 ABKB 661).
Here are the key takeaways:
1. Voth WAS a Fiduciary (Strong Prima Facie Case on Status)
- Even though he was not the cheque-signer or bookkeeper, Voth was the “face of the company” and the primary reason clients did business with Garbage King.
- The business was built on mutual interdependence: Saunders’ money + Voth’s relationships and expertise.
- This made Garbage King highly vulnerable to Voth’s departure → he was a “key employee” and owed post-employment fiduciary duties (no active solicitation and no use of confidential information for a reasonable period).
2. But No Breach of Those Duties Was Proven on the Evidence
- There was no evidence of active solicitation – clients followed Voth because of pre-existing personal relationships and his reputation, not because he poached them.
- The “cooling-off period” had long expired (clients could have been contacted within days or weeks, given the small client base).
- There was no proof Voth took or used physical/electronic client or pricing lists. Industry pricing knowledge and relationships carried in his head were not confidential.
- Customers publicly displayed Garbage King branding on bins and porta-potties – client identities were not secret.
3. Irreparable Harm Not Established
- Lost revenue was quantifiable and compensable in damages.
- Garbage King was still profitable two-and-a-half years later; VP Disposal would suffer real harm if it was suddenly barred from servicing its now-established clients.
4. Balance of Convenience Strongly Against an Injunction
- The two-and-a-half-year delay weighed heavily (even though the judge said a delay is better dealt when considering costs).
- Forcing customers to switch providers again in 2025 would help no one and would likely drive them to a third competitor, not back to Garbage King.
- Public policy favours employee mobility and customer choice in the absence of a restrictive covenant.
The 10 Practical Lessons for Employers and Owners
- If you don’t have an enforceable signed restrictive covenant (non-compete/non-solicit), your chances of stopping competition are extremely low.
- Fiduciary status depends on function and vulnerability, not title. The “face of the business” in a relationship-driven industry will almost always be a fiduciary.
- Fiduciary duties only restrict active solicitation and misuse of true confidential information for a reasonable (usually short) cooling-off period.
- Clients following a departing employee because they like/trust that person is legally permissible.
- Knowledge in the employee’s head (pricing experience, customer preferences) is generally not protectable.
- Delays can kill injunction applications – act within weeks, not years.
- Courts will not grant a de facto non-compete just because you call it protection of confidential information.
- Branding your equipment with your company name undermines any claim that client identity is confidential.
- Small, relationship-driven businesses are inherently vulnerable when the key relationship-holder leaves.
- Damages, not injunctions, are the usual remedy – plan your exit capital and litigation funding accordingly.
Bottom Line
This is now the leading Alberta authority on the limits of fiduciary protection in the absence of a restrictive covenant. Even when the court finds that a previous employee was a key/fiduciary employee and their departure resulted in a devastating loss of business, an interlocutory injunction will almost never be granted unless there is clear evidence of active solicitation or misuse of truly confidential information — and a delay of two-plus years makes that finding close to impossible.
Employers are advised to ensure they have enforceable agreements starting from day one. Without them, the only realistic remedy could be a (very expensive and uncertain) trial for damages.
Source: 2025 ABKB 661 (CanLII) | Garbage King Inc. v Voth | CanLII
