Fired for Off-Duty Conduct: Should that hold up?

Can inappropriate off-duty conduct be used by an employer to dismiss an employee for just cause?  The answer is far from clear.

By now, you have probably read about or seen a video of the incident at BMO field.  A CityNews reporter was heckled with the obscene phrase “FHRITP” by a guy looking to grab some attention and get himself on the news.  One of the guys with him defended the vulgarity and expanded on it.  The reporter, Shauna Hunt, fired back.  She professionally pushed these guys, on air, to explain why they would act in such demeaning fashion towards a female reporter.  This was not the first time she had been faced with this harassment and she decided to push back.  The video made its way through cyberspace.  Shortly afterwards, HydroOne fired one of the guys involved in the incident.  Here is the video of the incident.

I am not looking to defend the behaviour of these louts.  There should be little societal tolerance for those who wish to attack and delegitimize women reporters by yelling obscene sexual phrases at them.  Perhaps a complaint could be filed with the Ontario Human Rights Commission and damages could be awarded.  Maybe some type of civil lawsuit would be appropriate.  Or perhaps there are other avenues for dealing with this.

But the question in an employment law blog – is whether this justifies the loss of employment for the obscene heckler and his off-duty conduct.  Even though this happened after a soccer match rather than a basketball game, The answer is still no slam dunk.

If these individuals had been employees of MLSE, for example, and had yelled out these phrases, on air, at an MLSE event, the connection would be clear.  They would have been acting as representative employees of MLSE and there would have been little doubt that dismissal would be the appropriate remedy.  Or if they had been fellow reporters, at the scene while conducting other interviews.

But the guy who was fired was an employee of HydroOne which had nothing to do with this incident.  So the individual was fired for off-duty, obscene conduct, which had no connection to his employment.  He was not charged.  The public would not have associated him with HydroOne, unless he was in a position in which he would regularly deal with public.  If for example, he was in a customer relations position at HydroOne, or a human resources role, the case might be a bit different.

HydroOne has stated that this was a violation of their “Code of Conduct.”  It is certainly admirable of the company to take a strong stand against sexual harassment in the workplace and in society in general.  It is understandable and legally supportable that HydroOne would take steps to ensure that nothing like this occurs in its workplace or in connection with its workplaces.

But off-duty conduct that violates a “code of conduct?”  What are the limits of that code?  Lots of activities might be violations.  Does an employer have the right to follow employees around, off hours, and check up on whether their off-duty activities may or may not violate a code of conduct?  Will HydroOne send representatives to its employees’ private, off-duty parties to monitor what happens once their employees have a few drinks?  Will HydroOne start firing employees for behaviour at their kids’ hockey games, where many parents yell all kinds of obscene things?  Where is the line?

In response, HydroOne might say that they did not need to follow anyone anywhere nor do they intend to do so.   This incident simply became so public that the association with HydroOne caused public embarrassment – to the employee and to the employer.  HydroOne had to act to send a public message that it takes sexual harassment seriously.

While I can certainly understand the embarrassment to the employee, I’m just not sure that anyone would have drawn a tie in between the employee and HydroOne if HydroOne had not identified the protagonist as a HydroOne worker.

If the employee was in a non-unionized position, the issue would simply be whether or not there was “just cause” for terminating his employment.  He would probably bring a wrongful dismissal lawsuit – and there is a reasonable likelihood that a settlement would be reached at some point, though it would be confidential.  But he would not get his job back and he would have few other remedies, aside from some compensation for the loss of his position.  If he could show that HydroOne’s conduct had violated the Ontario Human Rights Code in some way or if he could convince a judge that this was “bad faith” conduct, he might get additional damages.  But that seems like a stretch.  If successful, he would probably wind up with a decent severance package, perhaps in the range of one month per year worked.

On the other hand, if the employee was unionized, he could file a grievance and ask to be reinstated to his position.  He could argue that some action short of dismissal would have been appropriate.  A public apology, a short suspension or some other disciplinary measures.  Or perhaps, even, none at all.  An adjudicator will have to decide whether the employment relationship became so damaged that he could no longer continue as an employee.

In either case, the employer will argue that the employee’s very public behaviour was a violation of its code of conduct and caused the employer public embarrassment.  The employer had to make it clear that sexual harassment, by its employees, while not be tolerated even if the incidents in question involve off-duty conduct.

I have to conclude that this could be a frightening precedent.  Not because I am trying to defend this guy’s conduct, which I am certainly not.  But because I would have concerns about the extent to which a person’s unrelated off-duty conduct, even if reprehensible, can lead to termination of employment in a position that has nothing to do with the conduct.  If it is conduct for which someone is criminally charged – and perhaps even convicted, that becomes a different story.  Or if the conduct is somehow related to the type of position.  For example, if this guy had been a teacher.  One can easily see that parents would be wary of having their children taught by a teacher who conducts himself in this fashion.

But if the type of employment has no relationship whatsoever to the type of incident, the link becomes far more questionable.

We have already seen stories of employers scouring the Facebook pages of potential employees and even asking for Facebook passwords to be able to gather information about job candidates.   It has become clear that no conduct, these days, is truly private when everyone is equipped with a cell phone with a video camera and the ability to instantly upload movies.  But are there any limits as to how employers and potential employers can use all of this information and media?  This is probably an area of law that will continue to develop, quite rapidly.  But the incident does emphasize the point that any inappropriate conduct can become public extremely quickly.  Certainly police offers across Canada and the U.S. have been learning that lesson.

Maybe it is ultimately beneficial for society that people can suffer significant consequences for highly inappropriate behaviour.  Such behaviour might include public instances of harassment, racism, anti-Semitism and other demeaning behaviour.  But I’m just not sure that summary dismissal with no compensation, the “capital punishment of employment law” and being left without a job or an income is the correct remedy here.

It will be interesting to hear what Canadian courts have to say about this.  We will have to watch and see how this case develops.

Just Cause for Dismissal: Is One Incident Enough?

Is one incident of dishonesty just cause for dismissal?  What if it involves a long-serving employee?  This was the issue that was decided recently by the B.C. Court of Appeal in  Steel v. Coast Capital Savings Credit Union.  

The plaintiff, Susan Steel, was a help desk analyst.  She had been employed by the Credit Union for 21 years.  In 2008, the plaintiff accessed the personal folder of a manager.  The manager kept a folder for assigning parking spaces and the plaintiff wanted to check her status.  She was caught because the manager was accessing the folder at the very same time.  She was confronted and admitted her misconduct.  She also acknowledged that she did not have authorization.

At trial, the judge reviewed the case law, focusing on the Supreme Court of Canada’s landmark decision in McKinley v. B.C. Tel (2001) SCC 38. The court dismissed the case and found that Ms Steel had been dismissed for just cause.  The plaintiff appealed to the B.C. Court of Appeal.

By a 2-1 majority decision, the B.C. Court of Appeal upheld the trial court decision and dismissed the appeal.  As the Court of Appeal put it, “McKinley requires courts to apply a contextual analysis to determine whether employee misconduct amounts to just cause for dismissal….Following McKinley, a single act of dishonesty as a matter of law no longer gives an employer an absolute right to dismissal its employee.”

However, the Court of Appeal also noted that “a single act of misconduct can justify dismissal if the misconduct is of a sufficient character to cause the irreparable breakdown of the employment relationship.”

The majority of the court held that a breach of privacy was such a fundamental obligation in this type of employment position that the plaintiff’s action could be seen as causing a “fundamental breakdown of the employment relationship.”

In dissenting reasons, Justice Donald included this sentence:  “What is absent from the trial judge’s reasons is an explanation why a single instance of a breach of the privacy rules should end a 21 year career….The record does not show deceit, fraud, theft or stealth.  The misconduct was serious, as the judge found, but her analysis of the proportionality of the penalty left out a vital factor.”  Justice Donald would have allowed the appeal and remitted the case to the trial judge for an assessment of damages.

The McKinley decision has been cited many times and has been interpreted in different ways.  In some cases, it has been used to help dismissed plaintiffs obtain damages where many people might find the results to be puzzling and overly sympathetic.  In other cases, courts have limited the application of McKinley to minor or more limited instances of dishonesty or misconduct.

Ultimately, each judge applies his or own sense of “proportion” and reasonableness.  Here two appellate court judges held that one instance of this type of dishonesty was cause for dismissal, whereas one judge disagreed.

For plaintiffs and for employers these are risky cases.  They are fact driven.  But they also depend on sensibilities of the particular judge hearing the case as well as the appellate court panel that might hear the case if it is appealed.

For Susan Steel, this was a very costly and time consuming ordeal.  The Court of Appeal decision was released in 2015, some seven years after Ms Steel was dismissed.  Ultimately, she has been awarded nothing after 21 years of employment and may well have incurred significant legal fees.  The case is a reminder of the high stakes of pursuing just cause litigation where an undisputed instance of improper conduct is involved.

 

Dismissal of Ghomeshi: Some Employment Law Points

The dismissal of Jian Ghomeshi from the CBC continues to dominate headlines. At this point, however, it has really become much more of a case about sexual assault and the criminal proceedings that Ghomeshi faces rather than about the employment law aspects of the case. I am not going to delve into the criminal law aspects of this matter or get into a discussion about sexual assault laws in Canada. Instead, I wanted to highlight some of the employment law points that emerged from the case.

A CBC spokesperson announced earlier this week that Ghomeshi had dropped his $55M lawsuit against the CBC. According to the CBC, Ghomeshi agreed to a dismissal of the case and to pay $18,000 towards the CBC’s legal costs. Wow, what an embarrassing result; a total victory for the CBC.  In hockey terms, that is the equivalent of an 8-0 loss, something that Toronto Maple Leaf fans have been known to experience (even if the CBC will have fewer future occasions to broadcast these matches). Ghomeshi can still pursue a grievance arbitration, if his union decides to take the case to a hearing. But the only courtroom he is likely to encounter now will be a criminal court, if his case winds up going to trial.

I discussed some of the employment law aspects of his case here when some of initial details began emerging. Now that the case is effectively over, it is worth highlighting a few additional points:

  1. The best defence is not always an outrageous offence:

Although there are some very aggressive employment lawyers in Toronto, a pre-emptive strategy is simply not always the best course of action. Some Canadians might be tempted to think that a strategy that worked in the past for former Prime Minister Mulroney must be a sensible one. But each case has its own facts. Sometimes employees facing a dismissal with cause are able to negotiate a quiet resolution of their situation that involves minimal publicity and perhaps even a mutually agreeable statement about the person’s departure. It is far from clear that Mr. Ghomeshi would have been able to arrange that type of deal with the CBC. But a strategy of posting a lengthy message on Facebook, launching an outrageous, ill-conceived claim and remaining defiant is extremely risky at the best of times. It does not seem to have served Mr. Ghomeshi very well in this case.

  1. Appropriate legal representation

Unionized employees face a tremendous uphill battle in trying to sue their former employers. Generally, they are prohibited from bringing such cases. If they wish to proceed, they must show that the lawsuit raises issues that our outside of the scope of the employment relationship and can stand on their own as independent torts or causes of action. In Mr. Ghomeshi’s case, he claimed, among other things, that he was dismissed because the CBC made a moral judgment about his lifestyle choice. That type of pleading almost certainly doomed this lawsuit from the start.

Employment lawyers are left scratching their heads. We must prepare a pleading that stands a decent chance of surviving the requirements that have been set out by the Supreme Court of Canada. If this cannot be done, clients will usually be advised that the claim has no chance of success. Mr. Ghomeshi may well have been provided with that advice. However, Mr. Ghomeshi’s decision to proceed with such an ill-fated claim, even after having been provided with the assessment that success was virtually impossible seems highly questionable, at best, on the part of Mr. Ghomeshi and his legal team.

  1. Resolving an unwinnable case

The CBC did not even bother putting in a Statement of Defence in response to Mr. Ghomeshi’s claim. There was no need to do so. Instead, it simply brought a preliminary motion to strike out the claim as one that disclosed no real cause of action. Normally, that is a difficult standard to meet. Moreover, if a plaintiff becomes concerned that the case is unwinnable or that there are reasons to drop it (like the prospect of criminal charges), this can often be done on terms that are close to neutral for the plaintiff. Many defendants will agree to a consent dismissal of a lawsuit without the payment of any legal costs. If legal costs are to be paid, most defendants will agree to some type of confidentiality provision. In this case, Mr. Ghomeshi appears to have surrendered completely. His case was dismissed with costs. It was announced publicly. And it was also announced that he was forced to pay the CBC’s legal fees of $18,000. While there are certainly cases in which a plaintiff is ordered to pay the defendant’s costs after losing an actual trial, it is quite rare for a plaintiff to pay legal costs just for the privilege of dropping a lawsuit. Obviously, there are many facts that the public has not been told and it became quite clear to Ghomeshi and his lawyers that he was likely to wind up paying a much higher amount in legal fees if the case was dismissed by court after hearing the motion.

Overall, the case has been a reminder that lawyers cannot work miracles. Sometimes the best strategy for dismissed employees facing strong just cause cases is to negotiate the best possible, confidential, walk-away resolution. If that cannot be done, steps should still be taken to minimize the potential damage rather than exacerbate it.

Just Cause for Dismissal? Hard to Prove.

What kind of conduct is just cause for the dismissal of a teacher?  If the teacher has been a long serving employee, the threshold will be quite high, according to a recent Ontario Superior Court decision.

In the case of Fernandes v. Peel Educational & Tutorial Services Limted, the plaintiff was awarded one year’s salary.  Perhaps more significantly, he was awarded the value of disability benefits that he would have been eligible to receive because he became disabled within a short time period after being dismissed.

Mr. Fernandes had been a teacher with Peel Educational Tutorial Services for more than 10 years.  In 2009, the school alleged that Mr. Fernandes had falsified students’ marks and committed “academic fraud” by doing so.  Mr. Fernandes conceded that some of his calculations were incorrect and that there were some issues with his submitted marks.  But he denied his conduct was “fraudulent.”

This case involved a 10 day trial, which featured the evidence of numerous witnesses.  One of the witnesses called by the school was  a “Mr. Zero,” who certainly has an interesting name for a witness in which one of the allegations is that certain students should have been given a mark of “0” for failing to hand in assignments.

In any event, after all of this extensive evidence, Justice Lemon concluded that Mr. Fernandes had been wrongfully dismissed.

The court made some interesting findings including:

  • Mr. Fernandes gave incorrect marks;
  • The marks he gave were late;
  • He allowed students to have overdue assignments;
  • Even though he was a computer teacher, his own computer program did not provide accurate marks;
  • He lied to his employers about how the marks were calculated;
  • He lied to the court about the student presentations were marked;
  • He admitted to falsifying some marks on students’ records.

These are all findings made by the court and appear in the decision.

However, the court also noted that Mr. Fernandes had been employed for more than 10 years and up to these incidents, was considered a “well-regarded teacher.”

Taking into account all of the circumstances and relying heavily on a charitable reading of McKinley v. B.C. Tel (2001) S.C.C. 38, [2001] 2 S.C.R. 161, the court concluded that “immediate termination was not the appropriate sanction for this misconduct.”  The court noted that “the defendants could have fashioned a reprimand and a warning that such conduct, if repeated, would lead to summary dismissal.”   The court awarded Mr. Fernandes one year’s compensation amounting to just over $50,000.

Mr. Fernandes had also sued for $300,000 in “intentional infliction of mental distress.”  This claim was rejected.

However, in addition, he had brought a claim for “long-term disability benefits” for $226,000.  At trial, he demonstrated that he was suffering from severe depression and other related symptoms.  The court held that he became disabled after being dismissed and during the applicable notice period.  The employer was therefore responsible for the full value of the disability benefits.  Given that Mr. Fernandes was 52 at the time of dismissal, this could mean approximately 13 years of LTD benefits, for which the defendant school would be responsible.

It remains to be seen what the Ontario Court of Appeal will do with this case.  Given the findings of the judge, there seems to be significant findings of improper conduct that may well warrant a just cause dismissal.  Although the judge was in the best position to make these findings of fact, the Court of Appeal may well review the court’s conclusion that just cause dismissal was not warranted in the circumstances.  It should provide for some interesting reading if the case is actually appealed and argued.

Irrespective of what ultimately happens with this case on appeal, if it gets there, here are some key points to consider:

1.  Establishing just cause for long service employees is extremely difficult and costly.  Many judges are willing to give plaintiffs the benefit of the doubt, even where serious misconduct is alleged.  Even were there is evidence of some misconduct, courts will consider the whole employment history of a dismissed plaintiff;

2.  Dismissed employees can and should fight employer determinations of “just cause” if there is any reasonable prospect of success and sometimes, these cases can sometimes even be won where the prospects look grim;

3.  Dismissed employees are entitled to insurance benefits during any applicable notice period.  If they are cut off from these benefits by their employer and then later found to have been wrongfully dismissed, employers will be responsible for the full value of the benefits.  This means that if an employee dies during a notice period, the employer will be responsible for the full value of the life insurance policy that had been in effect.  If the employee becomes disabled, the employer will be responsible for the full value of the disability benefits.  Employers need to consider liability very carefully before cutting of an employee from all benefits when making a termination decision.

 

 

 

Theft and Just Cause: Better Prove It!

Is theft just cause for termination of employment in Canada?  It might be.  But employers looking to support a just cause case with allegations of theft must be able to prove that they have built a very solid, airtight case.  Otherwise, the dismissed employee may well succeed with a wrongful dismissal claim and win substantial damages.

The recent case of Dennis v. Ontario Lottery and Gaming Corporation (2014) ONSC 3882 demonstrates just how high the bar may be for Ontario employers.

The plaintiff, Brenda Dennis, was a security manager for the defendant, the OLG.  She had worked for the OLG for more than 13 years in a senior position, supervising some 55 employees.

Ms Dennis was dismissed on what was, initially, a without cause basis.  She was offered a severance package of just under one year’s pay.  She signed off on the package and waited for her settlement funds.

However, it came to light that Ms Dennis had been in charge of arranging Wonderland tickets for OLG employees, for the social committee.  This was not an official part of her job duties.  However, in performing this role, Ms Dennis apparently “borrowed” more than $1,000 from the social committee’s Wonderland ticket proceeds.  She needed the money to pay debt she had incurred after becoming the victim of a Nigerian scam.  She gave evidence that she had always intended to repay the money.

Before paying out Ms Dennis’ severance, OLG discovered that there was a shortfall of more than $1,000 from this Wonderland ticket arrangement.  It questioned Ms Dennis and decided to withhold the agreed upon severance pending a further investigation.

Ms Dennis was charged criminally with theft but the charges were ultimately dropped.  However, OLG continued to maintain that Ms Dennis had stolen the money and that this would constitute just cause.  It refused to pay out the agreed upon settlement.  Ms Dennis sued and argued that there was no evidence of theft as she had always intended to repay the money.  She sued for an order that OLG should be required to honour the settlement arrangements.

OLG took the position that this was “after acquired cause” and that it should not have to pay out the funds since it had discovered the “theft.”

After reviewing various just cause decisions, the court came to the conclusion that termination with “just cause” would be “totally disproportionate.”

Justice O’Marra relied on a number of points:

1.  Running the social committee’s Wonderland ticket program was something that was “voluntarily assumed” by the plaintiff was not “an essential condition of her employment contract with the OLG;”

2.  Ms Dennis might not have believed or understood that “borrowing” the money would be criminal;

3.  The victim was Canada’s Wonderland rather than Ms Dennis’ employer;

4.  The employer concluded that Ms Dennis had admitted to theft but she had only admitted to borrowing the money;

5.  The internal investigation was “inadequate and inaccurate;” and

6.  The employer had agree to pay the settlement funds and Ms Dennis had signed a release that OLG had prepared.

The court therefore concluded that OLG could not maintain just cause and that it was required to pay out the agreed upon severance amounts plus legal fees.

The end result is one that seems very charitable for Ms Dennis, the dismissed employee, using the analysis the court proposed.  Obviously, this was a compassionate judge who considered the human elements of the case, the impact on Ms Dennis of being denied severance after 13 years and the circumstances in which Ms Dennis had been the victim of a Nigerian scam.  There is certainly case law support for taking into account these types of considerations.

However, stepping back for a moment, the facts seem to show that Ms Dennis’ actions were quite serious.  She removed and used more than $1,000 from a social committee fund that did not belong to her and only repaid the money after being caught.  For many judges, this may well have met or exceeded the high standard required for an employer to prove just cause, particularly for an employee in a position of trust in a high level security role.

It remains to be seen whether this decision will be appealed and how the Ontario Court of Appeal would approach the case.

The court may well have come to the same result by focusing on the deal that the employee had reached with the employer.  Since Ms Dennis had already signed off on a signed release that the employer had prepared and had already agreed to a deal, it would probably have been fair for the court to say that it was too late for the employer to start making allegations of just cause after the deal was concluded.  Instead, the court delved into issues of just cause and theft.

If the decision is upheld, particularly the court’s analysis of the theft allegations, it will demonstrate quite clearly that wrongful dismissal law in Canada is heavily skewed in favour of employees.  While more often than not that is a good thing, this type of decision will leave some employers wondering whether the just cause bar can ever be reached.

Perhaps the real message that should have been taken from this case is that neither side can reopen a severance deal once the deal has been negotiated and the release has been signed unless there is clear evidence of misrepresentation by one side or the other, which was clearly not an issue in this case.

 

 

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