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.

 

Use of Summary Judgment Motions in Dismissal Cases

What are summary judgment motions?  Are they effective in wrongful dismissal cases?  A recent decision of the Ontario Court of Appeal in Arnone v. Best Theratronics Ltd. has provided some helpful guidance for those who would like to use this process.

A summary judgment is a motion for judgment that bypasses the need for a trial.  It can be used where there is no “genuine issue” that requires a trial.  It can often allow parties to save time and legal costs and has been used quite often in Ontario more recently in non-cause wrongful dismissal cases.

The case involved a 53 year old employee who was dismissed without cause after 31 years.  After the parties could not come to a mutually agreeable severance arrangement, the employee sued for wrongful dismissal.  Rather than proceed to a trial, he brought a summary judgment motion in the Ontario Superior Court.  Although this process allows parties to bypass some of the more expensive procedures in other litigation cases, including extensive examinations for discovery, motions and a trial, it can still be a costly process.  Here there were cross examinations on affidavits filed in preparation for the summary judgment.

The motions judge hearing the case initially made a number of findings and awards that were challenged on appeal to the Court of Appeal.  For purposes of this note, I wanted to highlight some key findings of the Court of Appeal, which are relevant and helpful to future litigants.

1.  Summary Judgment is a Great Process for Without Cause Wrongful Dismissal Cases

The Court of Appeal had little trouble concluding that there were no “genuine issues requiring a trial.”  It noted that “a straight-forward claim for wrongful dismissal without cause, such as the present one, strikes me as the type of case usually amenable to a Rule 20 summary judgment motion.”  The defendant tried to resist the motion by arguing that it was unclear whether the plaintiff was a customer service specialist or a manager.  The defendant argued that this issue required a trial.  The Court of Appeal held that there was no issue requiring a trial.  It also noted that, in any event, “character of employment” is a “factor of declining importance.”  In other words, the factors that are far more important to consider include a dismissed employee’s age and length of service rather than the actual position that the person held.

2. Reasonable Notice

The motions judge awarded the plaintiff a notice period of 16.8 months since that was the amount of time that the plaintiff needed to bridge his pension.  The Court held that this was an incorrect approach.  However, the Court increased the notice period to 22 months, upholding the alternate finding that the motions judge had made.  The defendant argued at the Court of Appeal that the notice period should have been 14.4 weeks.  This position was roundly rejected and the Court of Appeal held that 22 months was “within the acceptable range of notice periods for employees in circumstances similar to the plaintiff.”

3.  What About Mitigation?

The Court of Appeal confirmed that any money earned by a dismissed employee during the applicable notice period is to be deducted from the amount that the employer is ordered to pay for the applicable notice period.  There is little new here as this is a statement of well settled law.   If the plaintiff starts earning a higher income during the applicable notice period, this decision suggests that the plaintiff could actually lose money by having a longer notice period.  However, the notice period in this case ensured a full pension for the plaintiff.

4.  Pension Benefits

Dismissed employees are entitled to the “present value of the loss of pension benefits during the notice period.”  This calculations should be performed by an actuary.  In this case, the assessment of $65,000 as the pension loss by an expert actuary was not challenged.

There were two other issues in this case that are less commonly contested.  The plaintiff was awarded a “retiring allowance of 30 weeks’ pay” based on a company policy that provided a retiring allowance of one week’s pay per year to retiring employees.  The court held that the “retiring allowance” policy did not clearly exempt dismissed employees from receiving the retiring allowance.  This allowance was payable in addition to the other wrongful dismissal damages.

It is also worth noting that the motions court made a cost award of $52,280 on this summary judgment motion.  The cost award was challenged by the plaintiff, who had apparently made an official “Offer to Settle” before the motion that was not seen by the motions court judge after the issue of liability was determined.  The plaintiff wanted to argue that he would be entitled to costs on a higher scale as a result of having submitted valid offers to settle before the motion.  Moreover, there would still be further costs to be awarded as a result of this appeal.  The Court of Appeal agreed that the issue of costs should be reexamined in light of the offers.

The end result is that this was certainly not an inexpensive summary judgment motion.  While it is true that the parties avoided many days of trial, there were still affidavits, cross examinations and submissions.  Nevertheless, the process seems to have worked out quite well for the plaintiff, on paper at least, who was ultimately awarded 22 months’ pay less any amounts earned during that period, a retiring allowance equal to 30 weeks’ pay, pension damages of $65,000 and a significant costs award.

Plaintiffs who have been dismissed without cause and provided with a low ball offer may be well advised to consider a summary judgment motion as the best way to advance a wrongful dismissal claim through the legal process.

 

 

Fixed Term Employment Contract? Better Prove It!

When is a fixed term employment contract not enforceable?  A recent decision of the Ontario Superior Court in Tossonian v. Cynphany Diamonds Inc. addressed this issue.  The court held that the fixed term guarantee was not part of the original deal between the parties and threw out that part of the contract.  The plaintiff was still awarded wrongful dismissal damages but they were much lower than they would have been if the employment contract had been enforceable.

The plaintiff, Razmig Tossanian, moved from Vancouver, B.C. to accept a position at Cynphany Diamonds in Toronto.  According the trial decision, the plaintiff was looking for an opportunity to move his family to Toronto.  After lengthy negotiations, he accepted an email offer of employment that purported to be based on an oral agreement.  The email set out the various terms that had been agreed upon, but made no mention of a five year fixed term.  The plaintiff did not respond in writing, though he indicated that he had called the owner of Cynphany to confirm the five year guarantee.

The plaintiff moved from Vancouver to Toronto without anything further in writing.  He began working for the defendant in late August 2011.

Some weeks later, the parties signed an “Employment Contract.”  This document did not reference the five year term.  A further document, for mortgage purposes was prepared, and signed by the defendant.  The second document stated that the plaintiff had a “guaranteed five year position.”

There was yet another document that also referenced a five year period, which was also prepared for mortgage confirmation purposes.  When the bank called to confirm, the owner of the defendant confirmed the five year term.

Mr. Tossanian worked for a total of approximately 8 months for the defendant.  At some point, according to the evidence, the plaintiff began having discussions with another potential employer and he shared information with these discussions with at least one co-worker.  He apparently suggested to his co-worker that he had a guaranteed job if he was fired by Cynphany Diamonds.  The owner of the defendant found out about these discussions and became quite upset.  There was a factual dispute about whether or not the plaintiff resigned or was fired but the evidence seems to be fairly clear in this regard that he was fired.  He was not fired for just cause as it is not cause to fire an employee for looking for other work.  Just cause was not argued at trial.

After being dismissed, the plaintiff went to the potential employer but the job opportunity that he had been pursuing fizzled.  Ultimately, he wound up returning to Vancouver and going back to his old position after just more than 4 months.  This position was at a much lower rate of pay.

The plaintiff sued for wrongful dismissal.  He alleged that he had a five year fixed term employment agreement and that it had been breached.  Even though he found work after four months, he claimed that his losses over a period of five years would amount to approximately $175,000.

The court does not seem to have been impressed by the plaintiff or his evidence.  Despite the various written agreements, the court held that the initial email between the parties was the key document and it did not reference a five year term.  Although the employer made “inflated representations about the duration of Mr. Tossanian’s employment contract to help him get a mortgage” the five year term had not formed part of the initial employment contract.  The court held that there was no new consideration for the five year guarantee.  The decision notes that the presiding judge did not feel that a salesperson of fine jewellery would require a five year fixed term employment contract.

Even though the court refused to find that there had been a five year guarantee, it still found that the plaintiff had been wrongfully dismissed. The court then had to turn to the applicable notice period.  The judge was not particularly sympathetic to Mr. Tossonian.  He was awarded a total notice period of two months, amounting to just over $13,500.  This was awarded after a trial that spanned over seven days, not to mention all of the preliminary motions, examinations and other court appearances.  Ouch!

In some respects, the decision is puzzling.  The plaintiff had at least two documents, signed by the defendant, providing for a guaranteed five year period.  Although the owner of the defendant provided evidence that things were not really as they seemed, the court’s explanation of why the five year fixed term employment agreement should not be enforceable is not particularly convincing.  If the defendant signed a document guaranteeing a five year period, provided that document to third parties and answered oral inquiries in a manner consistent with that document, there seems to be ample reason to find that the document was binding.

The court’s decision was likely coloured by the plaintiff and by the court’s assessment of the plaintiff as a witness.  The judge did not seem to like the plaintiff’s explanation as to why the five year fixed term was not included in the original email.  The court was less than impressed by the plaintiff’s efforts to find work for another employer, while still employed by the defendant.  In particular, the court found that the plaintiff had discussed that with at least one other employee and this caused the judge to empathize with the employer. As well, the court noted that the plaintiff returned to his old position reasonably quickly after being dismissed and may have had other opportunities as well.

The judge’s assessment of the plaintiff and that plaintiff’s character was quite damaging.  Not only did the court reject the five year term but it also awarded the plaintiff a very short notice period of only two months.  Courts have a great deal of latitude in selecting the appropriate notice period.  Although judges are supposed to consider the length of service, age, type of position and a variety of factors, decisions are inevitably coloured by the likeability of the plaintiff as a witness.

It may well be that this case is headed for an appeal to the Ontario Court of Appeal for a reassessment.  While the two month notice period is probably not likely to change if the Court of Appeal upholds the court’s findings, the real issue is whether or not the employer was bound by a five year employment contract.  This seems to be a question of law and one which the Court of Appeal may well consider carefully and could even reverse, depending on the particular Court of Appeal panel.

The decision is a reminder of some very key points that apply to many employment law situations:

1.  An enforceable contract must contain all of the terms and must be agreed upon by both sides, in advance, prior to the start date.  Oral representations, side agreements and “confirmation of employment letters” may not be binding if they conflict with the original contract;

2.  Where an employee finds work after being dismissed, courts will be reluctant to award large scale damages unless there is a very compelling reason to do so;

3.  Whether or not a witness makes a favourable impression on the court is crucial.  If a court has concerns about a witness’s honesty, character, motivation or if a court has other concerns, that may well have disastrous consequences for that side.

 

 

 

 

 

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.

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