Park v. Costco: Ontario Court Upholds Just Cause Dismissal Of Employee Who Intentionally Deleted Company Website

• Law Firm: Cassels
• Subject Matter: Employment and HR, Health & Safety, Employment Litigation/ Tribunals
• Author: Mr Jed Blackburn
• Published date: 29 March 2023

In the wake of the Ontario Court of Appeal's decision in Waksdale v. Swegon North America Inc., 2020 ONCA 391 (previously reported on here), many employers have had questions regarding the distinction between "just cause" for termination at common law and the statutory test for "wilful misconduct, disobedience or wilful neglect of duty" under Ontario's Employment Standards Act, 2000 (the ESA).

While terminations for just cause at common law and under the ESA standard require a very high threshold of misconduct and should be approached with caution, the doctrine of just cause remains very much alive in Ontario, as recently confirmed by the Superior Court of Justice in Park v. Costco, 2023 ONSC 1013. Indeed, Park represents a good example of circumstances where this high threshold was met and provides some instructive lessons for employers when considering a termination for just cause at common law and/or wilful misconduct under the ESA.

Background

Park involved the termination of a 20-year employee of Costco who, at the time of termination, was 43 years old and held the position of Assistant Buyer in the lawn and garden department of Costco's Ottawa office.

As an Assistant Buyer, Mr. Park had management responsibilities (including supervising a number of inventory control specialists) and was responsible for monitoring inventory, setting prices, and negotiating with vendors.

Further, as a managerial employee Mr. Park was subject to Costco's "Standard of Ethics - Managers/Supervisors," which among other things stated as follows:

In accepting a position of management, you must be committed to and demonstrate a role of honesty and forthrightness. Anytime there is the slightest doubt about an activity that could be questioned regarding honesty, integrity or intent, you must discuss it with your Manager or Regional Vice President to remove any doubt. Managers above all else lead by example.

...

At the core of our philosophy as a company must be the implicit understanding that not one of us is required to lie or cheat on behalf of Costco or to enhance our company or personal performance. Managers must never engage in any activity that could raise a question concerning their integrity.

Mr. Park's employment agreement also included a section entitled "Causes for Termination," specifying a number of circumstances where "the general course of action will be termination of employment." The specific causes for termination included the following:

18. Wilful damage or destruction of Company property, equipment, merchandise or property of others on Company premises.

19. Any act of insubordination, including but not limited to:

a. refusal to comply with the direct...