Fiduciary Foul Play: ABKB Grants Injunction Against Former CEO Who Secretly Built Competing AI Software | JD Supra
Summary
The Court of Kings Bench of Alberta granted an interlocutory injunction restraining a former CEO from creating or licensing AI-powered K-12 education software that directly competes with his former employer's product after finding he pursued the opportunity for his own benefit while employed. The former CEO covertly incorporated a rival AI company, used employer resources and personnel, secured grants, and publicly presented the competing product before his employment ended. The court applied the stronger prima facie case standard because the claims involved fiduciary duties, enforced the five-year non-compete tied to an asset sale, but found the breach-of-confidence evidence and the non-solicitation clause insufficiently supported or overly broad. The decision underscores that fiduciary breaches and clear restrictive covenants tied to commercial asset sales can be enforced, and it highlights the need for narrow, unambiguous drafting of post-employment restrictions.