Executive Summary: Key Legal and Evidentiary Issues

• Long-service senior engineer’s ongoing collaboration with his son on Suncor’s proprietary ITP technology, including patent-related work, without proper authorization or disclosure
• Repeated breaches of Suncor’s confidentiality, conflict of interest and intellectual property policies despite a formal written reprimand and multiple specific warnings
• Failure to file invention reports and to protect potentially patentable concepts (such as jet shear and bio-renewable/plastics co-processing) for Suncor’s benefit, while those concepts appeared in the son’s patent filing
• Persistence in promoting the son’s patent filing and related concepts within Suncor, even after being told to avoid discussions that could contaminate or conflict with Suncor’s intellectual property
• Application of the contextual “just cause” test, balancing seriousness and duration of the misconduct against Mr. Benham’s position, seniority, and prior disciplinary history
• Interpretation of RSU and stock option plan terms to determine that all equity awards were cancelled on termination for cause, with no further monetary entitlements, and an order that Suncor as successful party is entitled to costs (amount to be later determined)

Factual background and employment relationship

Mr. Kelly Benham was a highly experienced professional engineer and long-service employee, with over 40 years of continuous service through Gulf Canada, Petro-Canada and then Suncor. He eventually held the role of Senior Technical Advisor in Suncor’s Enterprise Technical Services (Enterprise TS) group, supporting complex refinery technologies such as fluid catalytic cracking, hydrofluoric acid alkylation and slurry phase cracking. His work was technically sophisticated and central to Suncor’s refining operations and technology implementation. Over time, he became closely associated with CANMET slurry hydrocracking (SHC) technology used at Petro-Canada’s Montreal refinery. Historical “pre-2000” files relating to this technology, including design drawings and third-party materials, had been kept at his home office with management’s knowledge, originally for consulting work to help Natural Resources Canada unwind Petro-Canada’s obligations to license and operate CANMET SHC technology. As the years progressed, there was uncertainty about the ownership of those legacy files and the precise scope of Petro-Canada/Suncor’s rights in the CANMET SHC technology, but Mr. Benham accepted that some of the material in his home office included Petro-Canada/Suncor confidential information.

Development of the ITP patent and the son’s involvement

In 2017–2018, renewed interest in the CANMET SHC technology led Suncor to explore a new patent, ultimately called “An Integrated Thermal Process for Heavy-Oil and Gas to Liquids Conversion” (the ITP Patent). This innovation work fell under Suncor’s Enterprise Technology Development (Enterprise TD) group, led on the ITP file by Director of Technical Development, Todd Pugsley. Mr. Benham, still in Enterprise TS, was nevertheless deeply involved in technical development alongside a colleague, Mark Archer. Around the same time, Mr. Benham’s son, Nick, a relatively new engineering graduate, was seeking employment with Suncor’s Enterprise TD. Nick explicitly identified a strong interest in SHC integration opportunities. Without seeking or obtaining his supervisor’s approval, Mr. Benham drew Nick into the ITP Patent work. Nick spent “hundreds of hours” assisting with patent research, drafting, and conceptual development, including patent searches in public databases and discussions about differentiating ITP from the underlying CANMET technology. Mr. Benham shared internal communications about the ITP Patent, including emails with Suncor’s external patent counsel and confidential drafts, and he copied Nick on internal exchanges with Suncor colleagues. Ultimately, Mr. Benham credited Nick with the key differentiating idea that became central to the ITP Patent.

Initial legal concerns, reprimand and policy framework

In June 2018, Mr. Benham advised Suncor’s external patent counsel that Nick had been involved and should be recognized as an inventor. That led to a meeting with Suncor’s internal intellectual property counsel (Suncor IP legal), which revealed two concerns: (1) the long-standing storage of pre-2000 business records containing confidential information in Mr. Benham’s home office, and (2) disclosure of ITP Patent content to Nick, a third party not yet employed or independently retained under Suncor’s IP protections. Suncor IP legal subsequently wrote to Mr. Benham stating that the unsecure storage of Suncor confidential information at his home and disclosure to his son breached his contractual confidentiality obligations and violated Suncor’s Standards of Business Conduct and relevant policies. Mr. Benham was required to deliver the pre-2000 files back to Suncor and to arrange a non-disclosure agreement (NDA) and assignment from Nick, which Suncor ultimately obtained along with adding Nick as a named inventor on the ITP Patent. The ITP Patent was filed in July 2018, with a one-year window for finalizing claims. Suncor planned to test the technology at its Devon facility as the Devon Pilot Project, with a longer-term goal of integrating it at the Edmonton refinery through the Edmonton Bitumen Integration (EBI) project. Suncor’s policy framework was central to the later analysis. Its Standards of Business Conduct encompassed multiple Policy Guidance and Standards documents, including the Intellectual Property Standard (IP Standard) and the Conflict of Interest Policy Guidance & Standards (Conflict of Interest PG&S). These documents, summarized in an accessible booklet, “The Way We Do Business,” required employees to protect confidential and proprietary information, to obtain leader approval before disclosing it to third parties, to avoid conflicts of interest, and to seek legal or supervisory guidance where such risks might arise. The policies clearly warned that violations could lead to discipline up to and including dismissal. Mr. Benham, as a senior technical advisor and experienced inventor, was expected to know and follow these rules.

The 2018 reprimand and early conflict signals

Despite being alerted by Suncor IP legal to the seriousness of his disclosures, Mr. Benham continued to involve Nick in conceptual work related to ITP. In July 2018, he emailed Mr. Pugsley about a “jet shear” process concept inspired by Nick’s research on partial upgrading technology and suggested that this concept, integrated with ITP, could be the subject of a quick and inexpensive overlay patent. Although Suncor required all potential inventions to be reported via an Invention Report Form—even at a conceptual stage—Mr. Benham did not file such a form and did not bring the jet shear concept to Suncor IP legal. As a result, Suncor was unaware of this potential invention and had no opportunity to consider patenting it for its own benefit. In November 2018, Suncor issued a formal written reprimand to Mr. Benham addressing two key breaches: retention of business records at his home and disclosure of ITP Patent content to Nick. The reprimand cited non-compliance with the Conflict of Interest PG&S and IP policies, noted the risk created for Suncor’s ability to protect and patent its IP, and warned that any future policy violations could result in further discipline, including termination. Mr. Benham’s 2018 performance review reiterated the confidentiality and conflict-of-interest concerns. He responded in writing disputing aspects of the reprimand, but his superiors confirmed that the company’s conclusions remained unchanged and the reprimand stayed on his file.

Nick’s independent patent filing and deepening conflict

Nick continued working on ITP-related ideas and in early 2019 filed his own patent applications, first a preliminary filing and then a substantive patent entitled “Integrated Thermal Process for Sustainable Carbon Lifecycle.” This patent filing, not initially shared with Suncor, focused on enhancements to ITP to allow co-processing of plastics and bio-renewable feedstocks to generate “green” carbon and hydrogen, alongside elements Suncor believed overlapped with the jet shear concept. At the same time, within Suncor, there was growing internal interest in whether the ITP platform could be used to co-process bio-renewables and plastics. Mr. Benham, who had raised these ideas in his own performance materials, did not submit an Invention Report Form for these potential enhancements, nor did he disclose that Nick was working in this very area. After the ITP Patent’s amendment window closed in July 2019, Mr. Benham wrote to his supervisor, Hieu Tran (General Manager, Enterprise TS), complaining about the patent’s scope and lack of international filing and mentioning a “potential conflict of interest situation” without initially revealing that the “third-party” patents he was referring to belonged to Nick. He proposed that Suncor could use those patents—ultimately Nick’s Patent Filing—to fill gaps in the ITP patent portfolio and to secure a broader, internationally filed position, including in biofuels and plastics recycling. Only after repeated direct questions from Mr. Tran did Mr. Benham disclose that the third party was his son. He then took the proposal to Suncor IP legal, praising Nick’s expertise and stating that Nick was probably the second most knowledgeable person on ITP technology. The company’s concern at this point was two-fold: contamination of Suncor’s proprietary ITP work by an external patent owned by the employee’s close family member, and the redirection or loss of in-house IP value by promoting a competing patent rather than protecting enhancements for Suncor’s sole benefit.

Internal directions and repeated non-compliance

After an August 2019 meeting with Suncor IP legal, Mr. Tran testified that he cautioned Mr. Benham to “tread carefully,” avoid conflict of interest, and be extremely cautious in regard to any concepts contained in Nick’s Patent Filing, including plastics and bio-renewables co-processing. In internal communications, Mr. Tran and other leaders expressed deep concern about potential intellectual property contamination and conflicts. Suncor requested a copy of Nick’s Patent Filing in August 2019, but did not receive it until May 2020. In the interim, Mr. Benham continued to discuss ITP enhancements, promoting co-processing of bio-renewables and plastics and describing a potential “overlay” of Nick’s patent on Suncor’s ITP Patent. He repeatedly referred internally to patent filings that could strengthen ITP’s economic and commercial position—while not always disclosing that he was referring to Nick’s patent. In March 2020, for example, he suggested to Mr. Pugsley that Suncor had been negotiating access to an external patent filing that could enhance ITP and EBI project economics, without identifying that the patent was Nick’s. This behaviour perpetuated the lack of clear separation between Suncor’s confidential work and Nick’s competing or complementary IP. When Mr. Benham finally forwarded Nick’s Patent Filing in May 2020, he attached a “Bio Renewables Graphic” mapping bio-fuel and plastic co-processing into the ITP platform and portrayed Nick’s patent as providing “green” synergies and expanded applications for ITP. His managers, Mr. Tran and Enterprise TD General Manager, Mr. Wamboldt, did not explicitly approve use of this graphic; instead, they cautioned him that he might need to recuse himself due to the conflict of interest and directed that any IP and licensing strategy be coordinated through Mr. Pugsley and legal. Despite these warnings, Mr. Benham continued to circulate Nick’s technical commentary and to advocate for integrating plastics and bio-renewables co-processing, often forwarding Nick’s emails or research to internal teams while Suncor was still analyzing the patent and negotiating with Nick. Mr. Tran issued specific instructions in July and September 2020 to stop sharing Nick’s thoughts internally and to compartmentalize the two spheres—work and home—making clear that Suncor needed to avoid contamination between its own IP and Nick’s patent. Mr. Benham acknowledged these instructions but continued to promote related concepts and to use the Bio Renewables Graphic in EBI and Devon Pilot training materials.

Escalation, removal from the project and termination

By early 2021, Suncor managers remained concerned that Mr. Benham did not understand or accept the seriousness of the conflict of interest and IP-contamination risks. Mr. Tran decided that, given the sensitivity of the Devon Pilot Project and the centrality of ITP technology, Mr. Benham should be removed from that project. On 1 February 2021, he informed Mr. Benham of this decision and of an ongoing review of his conflict of interest. In follow-up written directions, Suncor explicitly told Mr. Benham he would no longer be involved in ITP technical reviews, could not access Suncor documents relating to ITP, and must cease all communication about the ITP pilot or related technologies and potential advancements unless specifically authorized. The company also noted that an investigation was underway. Mr. Benham, however, continued to view the issues through the lens of internal politics and disagreements over project ownership rather than as a serious disciplinary matter involving conflicts and IP protection. In mid-February 2021, he gave notice of his intention to retire effective 18 August 2021. Suncor, however, chose to complete its investigation rather than process the retirement. The investigation committee conducted both a technical review of Nick’s Patent Filing and a review of Mr. Benham’s conduct. Its fact-finding identified: delayed disclosure of Nick’s patent, Mr. Benham’s repeated promotion of using Nick’s patent within Suncor despite warnings, apparent overlap between jet shear concepts and Nick’s patent, and the risk that Suncor could inadvertently infringe Nick’s patent or lose the opportunity to protect its own innovations. On 18 March 2021, Suncor terminated Mr. Benham’s employment for cause, citing (i) failure to report a potential invention (jet shear and related enhancements) which later appeared in Nick’s patent, (ii) repeated advocacy for implementation of the potential invention through Nick’s Patent Filing, and (iii) continued promotion of possibly inventive concepts from Nick’s Patent Filing after urging Suncor to acquire that patent and after explicit instructions not to do so.

Legal framework: just cause and contextual proportionality

The Court applied the Supreme Court of Canada’s contextual approach to just cause, recognizing that while breaches of duty do not automatically justify summary dismissal, sufficiently serious and sustained misconduct that fractures the relationship of trust and loyalty can. The analysis required a broad look at the employee’s role, length of service, degree of responsibility, the employer’s policies and reasonable expectations, prior warnings, the scope and impact of the misconduct, and whether termination was a proportionate response. In this case, several factors weighed heavily against Mr. Benham. He was a senior technical advisor and recognized subject matter expert, entrusted with high-value confidential information and involved in patent generation and technology strategy. He had access to clear, accessible policies and was specifically trained and annually required to attest to compliance with Suncor’s Standards of Business Conduct, including the IP Standard and Conflict of Interest PG&S. He had ready access to supervisors and legal counsel who could have clarified or ratified his intended collaboration with Nick or his handling of overlapping patent concepts. He had already received a formal written reprimand and multiple explicit warnings, but continued to engage in conduct that blurred or ignored the required separation between Suncor’s IP and his son’s independent patent activities. The Court emphasized that Suncor’s confidential information extended beyond strict patentable subject matter to broader business information such as project timelines, economics, and strategic objectives, all of which Mr. Benham was positioned to influence and potentially expose. The Court found that his ongoing collaboration with Nick on ITP-related inventions, failure to report potential inventions for Suncor’s benefit, delayed disclosure of Nick’s patent and his persistent promotion of that patent within Suncor—even while negotiations with Nick were ongoing—were fundamentally inconsistent with his obligations of loyalty, fidelity and integrity.

Findings on misconduct, conflict of interest and trust

The judge concluded that Mr. Benham’s conduct demonstrated an ongoing breach of Suncor’s Standards of Business Conduct, particularly its confidentiality and conflict-of-interest components. Crucially, this was not treated as an isolated lapse corrected after a warning. Instead, it was a course of conduct stretching from at least early 2018 to early 2021, characterized by: unauthorized disclosure of confidential patent materials to a third party; failure to report potential inventions in accordance with policy; fostering and not properly managing a clear conflict between Suncor’s interests and those of his son; and repeatedly ignoring or minimizing the significance of explicit cautions and instructions from supervisors and legal counsel. The Court rejected Mr. Benham’s suggestion that he had authority to approve Nick’s involvement simply because of his seniority, finding that the IP Standard unambiguously required leader approval before disclosing confidential technical information and that he knew or should have known this. It also rejected the argument that the concepts (such as co-processing bio-renewables) were so broadly known in the industry that Suncor suffered no meaningful prejudice, holding instead that any innovations or integration ideas developed by Mr. Benham in the course of his employment should have been identified and protected for Suncor’s benefit, not diverted to or shared through his son’s patent. Overall, the Court held that his actions seriously impaired Suncor’s trust and confidence in him and undermined the core expectations inherent in a senior, IP-centric role.

Proportionality of dismissal and investigation concerns

On the proportionality question, the Court acknowledged criticisms raised by Mr. Benham about the internal investigation, including limited transparency about the composition of the investigation committee and the fact that he was not interviewed by its members. Nonetheless, the Court found that Suncor’s reliance on technical reviews by subject-matter experts and its documentation of Mr. Benham’s conduct and prior warnings were reasonable in the circumstances. The judge reiterated that Mr. Benham’s intentions might not have been malicious—he was not found to have set out to harm Suncor—but the legal standard for just cause focuses on the impact of the conduct and its incompatibility with the employment relationship, not solely on intent. Given his seniority, the sensitivity of the work, the length and repetition of the policy breaches, the sustained conflict of interest and the risk created for Suncor’s intellectual property, termination for cause was held to be a contextually appropriate and proportionate response.

Notice, resignation and the role of retirement plans

The Court went on to consider reasonable notice on an alternative basis, assuming for argument’s sake that just cause might not have been established. It found that Mr. Benham’s stated intention to retire on 18 August 2021 was clear, voluntary and unequivocal, formed in the context of an ongoing investigation but not the product of coercion or constructive dismissal. Objectively, his words and conduct supported a conclusion that he intended to end his employment on that date and did not seek other meaningful work after his termination. Applying principles from resignation case law, the judge determined that any reasonable notice period could not extend beyond his intended retirement date. On that alternative hypothesis, a five-month notice period, ending 18 August 2021, would have been appropriate.

Stock options, RSUs and policy terms

The judgment also addressed the status of Mr. Benham’s restricted share units (RSUs) and stock options under Suncor’s compensation plans. Under the RSU Plan in effect for the 2019 grant, all RSUs were subject to a “Restricted Period” ending at the close of the third calendar year after the grant. The plan provided that if employment ended before the end of the Restricted Period—whether or not for cause—the RSUs would be cancelled as of the termination date, with no entitlement to payout. Amendments applicable to RSUs granted after February 2020 added that, if an employee was terminated for cause after the Restricted Period but before the Award Payout Date, the RSUs would still be forfeited and unpaid. On the facts, the Court held that all of Mr. Benham’s RSUs were cancelled as of 18 March 2021 and, in any case where RSUs might have matured but not yet been paid, his lawful termination for cause disentitled him from any payout. Similarly, under the Stock Option Agreements, if an employee was terminated for cause, all options—whether vested or unvested—were cancelled immediately upon notice of termination. If termination occurred other than for cause, only the options already exercisable on the termination date would remain exercisable for the shorter of three months or the remaining option term, with unexercisable options cancelled. Importantly, the definition of “termination date” did not extend to any statutory or common-law notice period. Applying these terms, the Court found that because Mr. Benham was lawfully terminated for cause, all his options were cancelled as of 18 March 2021, and he had no ongoing option rights under the plan.

Outcome, successful party and monetary consequences

In conclusion, the Court held that Suncor had established just cause for summarily terminating Mr. Benham’s employment. The long-term pattern of unauthorized collaboration with his son on ITP-related inventions, failure to report and protect potential inventions for Suncor’s benefit, ongoing promotion of Nick’s Patent Filing within Suncor despite repeated warnings, and persistent conflict of interest fundamentally undermined the trust essential to his senior technical role. As a result, Mr. Benham’s wrongful dismissal claim failed. He was not awarded any damages for wrongful termination, nor any aggravated or punitive damages, and he was found to have no entitlement to additional value from his cancelled RSUs and stock options. The Court ordered that Suncor, as the successful party, was entitled to its costs of the action, but the specific amount of costs was left to be determined through subsequent written submissions; no exact monetary figure can be determined from this decision for costs or any other monetary award.