Kirk Van den Boogaard (the “Employee”) was a project manager for Vancouver Pile Driving Ltd., a marine contracting company (the “Company”). The Employee held a supervisory role overseeing site safety in safety sensitive and high risk work areas. He was also responsible for enforcing drug prohibition policies. His employment was terminated without cause and because he was not satisfied with the amount of severance offered to him, he sued the company in the B.C. Supreme Court in wrongful dismissal.

After the Employee had turned in his Company cellphone the Company discovered text messages where the Employee solicited a variety of illegal drugs from a unionized employee, including some drugs which were listed under the Controlled Drugs and Substances Act. Based on this evidence, the Company took the position that it had after-acquired just cause to cut off his severance. The B.C. Supreme Court agreed with the Company.

Foolishly, the Employee appealed the trial decision to the British Columbia Court of Appeal. The Court of Appeal dismissed the Employee’s arguments and upheld the decision of the trial judge.

This decision confirms that employers may rely on employee misconduct discovered post-termination in support of an argument of termination for just cause. Such terminations will be upheld, provided that the underlying factual context would have constituted just cause had the misconduct been discovered prior to termination.

This decision also suggests that employers operating in heavily-regulated, high-risk industries may be justified in holding their managers and supervisors to higher standards of conduct, in recognition of their key role in monitoring and enforcing workplace safety.

The Company had recruited the Employee to work as an IT specialist for its client, Goldcorp Inc. (“Goldcorp”). During the recruitment process the Company informed the Employee that his employment would be long-term. The Employee in fact left his prior secure employment to join the Company. His employment agreement with the Company was silent on termination notice or pay in lieu, but he was subject to contractual non-competition and non-solicitation obligations.

The compensation provisions of the employment contract were somewhat unusual. The Employee could opt between salary, a lower salary plus billable hours, or simply billable hours. If there were no billable hours the employee would be paid nothing (but would receive benefits) – and was “benched” for the time. Employees had the option to switch between these options with certain conditions. The Employee chose to be paid by billable hours only.

In June 2013, Goldcorp advised the Company that it no longer wished to have the Employee providing services to it. The Company was unable to place him with any other client. Finally, months later, on October 24, 2013, the Company gave him six weeks of termination notice after his not being paid for months and offered no severance.

Trial decision

The BC Supreme Court awarded the Employee damages based on a reasonable notice period of 10 months, which is very high for a 43-year old, non-management IT employee with just 2.5 years of service. The trial judge relied on several factors, including inducement to leave previous employment, the specialized nature of the Employee’s skills, the non-competition and non-solicitation obligations, and the limited availability of other employment. The trial judge also found that the Employee had not failed to mitigate his damages. The trial judge found that the promise of long-term employment at the Company was held out as an incentive for the Employee to leave his prior employment.

The trial judge found that the highly- specialized nature of the Employee’s skills and the Company’s inability to place him in another position warranted a longer notice period.

Court of Appeal Decision

The Court of Appeal found that there was evidence to establish that the Employee’s skills were not easily transferrable. He had only worked for one client while at the Company. Indeed, the company was not able to place him with another client after June 17, 2013. On this basis, the Court of Appeal upheld the trial judge’s finding.

The Court of Appeal confirmed that non-competition and non-solicitation clauses may increase the length of a reasonable notice period. Moreover, the Court confirmed that an employee need not prove that such restrictive covenants affected his or her ability to find work. Instead, the focus is on whether the employee believed they might limit his or her ability to do so. The Court thus agreed that the restrictive covenants applicable to the Employee justified an increased notice period.

The trial judge determined that the inability of the Company to find work for the Employee during the bench period, evidenced an actual shortage of work. The Court of Appeal however, held that if the Employee wished to establish that the notice period should be increased due to a shortage of work opportunities, he had to introduce evidence to that effect. Since the Employee had tendered no such evidence, he had not met the onus on him, and the trial judge’s decision was overturned as having no evidentiary foundation. In light of this factor the Appeal Court reduced the notice period to 8 months. In addition, the Court of Appeal took into account the contractual “bench period” to slightly reduce the calculation of damages. However, 8 months’ notice for a 2.5 year employee is exemplary.