Alberta Employment Law Update Spring 2012

IN THIS ISSUE Subsequent event evidence. The Alberta Court of Queen's Bench overturned a Provincial Court decision, noting the differences between after-acquired knowledge and post-termination conduct, and clarifying the proper test for reasonable notice. Contractual salary suspension and non-solicitation provisions. The Alberta Court of Queen's Bench held that contractual salary suspensions of a plaintiff sports agent during the NHL lockout were admissible, provided the agent still received the minimum wage. The Court also held that the agent's knowledge of—and inaction regarding—solicitation on his behalf was enough to establish a breach of the non-solicitation provisions in his employment agreement. Director's liability for the termination of employees. The Alberta Court of Appeal clarified the powers of directors in respect of the evaluation and termination of a corporation's employees. Gillespie v. 1200333 Alberta Ltd. Alberta Queen's Bench, 2012

(note: the content of this case summary has been updated since its original posting on May 3rd, 2012 to include more up-to-date information)

Facts: Bonita Gillespie ("Gillespie"), an occupational therapist, was hired on February 1, 2007, by the Defendant 1200333 Alberta Ltd. (the "Company") to work with various clinics serving the public as the Primary Care Network ("PCN"). Shortly after commencing her employment, Gillespie received and had the opportunity to review a "Policies and Procedures Reference Manual" ("PPRM") which covered areas such as benefits, annual performance reviews, and expectations of employees such as client confidentiality. Confidentiality was also covered by the documentation provided to Gillespie at hiring, including completion of a "Non-disclosure Agreement" ("NDA") dated February 1, 2007, and amended April 25, 2007. The NDA required Gillespie to take all security measures regarding confidential information, and expressly prohibited the removal, retention or destruction of any materials containing confidential information upon termination. On February 6, 2008, one of the doctors to whom Gillespie reported expressed concern over Gillespie's treatment of his personal nurse, and the manner of completion of a patient form. Gillespie was unable to fill out the form due to lack of information surrounding the patient, and was spoken to by her supervisor, Colleen Enns, in respect of the incident with the nurse. On February 11, 2008, Gillespie used harsh words with a newly hired social worker, and the following day was chastised by Ms. Enns and a Manager of an associated clinic for her language. Gillespie became extremely agitated and was consequently sent home from the meeting for two days and asked to return February 15, 2008. Justice Skitsko noted that while the official reason for sending Gillespie home was that "...she was too upset to see patients[,]" the real reason was to give Ms. Enns, Ms. Walker and Frank Couglan, the Chief Administrative Officer, the opportunity to consider Gillespie's future with the company. Before leaving the office on February 12, 2008, Gillespie was also given a letter of reprimand warning her that she would be subject to disciplinary action and/or termination if her behaviour did not show an immediate and sustained improvement.

In a 2011 Provincial Court decision, Justice Skitsko stated that it is settled law that an employer can rely on after-acquired knowledge that just cause existed at the time of dismissal, and also accepted that the removal of confidential client information which remained offsite with Gillespie for several months would prejudice the Company's business. He further held that the non-disclosure agreement and its wording negated Gillespie's argument that she could not be bound by the provisions as the actions occurred after termination, because such an interpretation would render the agreement meaningless.

Justice Skitsko dismissed Gillespie's claim, finding that the two weeks pay in lieu of notice was reasonable. In reaching this finding Skitzko J. applied the criteria established in Bardal v Globe and Mail Limited,(1960) 24 D.L.R. (2d) 140: the nature of employment, length of service, age of employee, and availability of similar employment in the circumstances, such as the economy. The Trial Judge also noted as a "salient factor" that the after-acquired knowledge gave the Company just cause for dismissal.

Issues:

The issues on appeal were whether the Trial Judge erred in law, fact, or mixed law and fact in concluding:

that Gillespie's post-termination conduct was sufficient to ground termination for cause; that Gillespie's post-termination conduct should factor into the calculation of reasonable pay in lieu of notice; and that two weeks' pay in lieu of termination was reasonable. Decision:

Sufficient grounds for termination for cause

Both Gillespie and the Company agreed that the Trial Judge failed to draw the distinction between after-acquired knowledge and post-termination conduct, or "subsequent event evidence". Madam Justice Ross of the Alberta Court of Queen's Bench noted that subsequent event evidence can be relied on when it sheds light on the reasonableness of dismissal for cause at the time of the dismissal, or when it reveals an undesirable aspect of the employee's character that would in itself justify the dismissal.

Justice Ross noted that "the finding of a breach of contract cannot be equated with a finding of a character flaw that would justify dismissal, especially in view of the Trial Judge's earlier finding that the Appellant was stunned and devastated when she removed the documents from the office [para 26]." Ross. J rejected...