Wrongful Dismissal And Abuse In Alberta

Wrongful Dismissal And Employee Abuse In Alberta

Work environments can host conflicting personalities and biases between employers, management, and employees. It is when these attitudes interfere with a company’s ability to function that there are serious problems and often unmet responsibilities of the employer. In the case of employee abuse and intimidation (verbal, mental, or physical) and wrongful dismissal, the employer must provide an employee compensation not only for displacing their right to earn a living, but also for the stress and pain they have caused that employee while in the work environment.
If you have been mentally or physically abused, intimidated, or sexually harassed at the workplace by, or under the knowledge of, your employer you need to speak with an employment lawyer in Edmonton immediately to understand your rights. Our employment lawyers can protect your dignity and help you collect the compensation that is rightfully yours. If there are elements of this case that match your circumstances, contact us today at 1-780-666-8161.

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Wrongful Dismissal Case In Ontario

ONTARIO SUPERIOR COURT OF JUSTICE B E T W E E N:
DUARTE DEFARIA
Gary A. Bennett, for the Plaintiff
Plaintiff
– and –
XTRA CANADA
Natalie C. Zinman, for the Defendant
Defendant
HEARD: January 21, 22, 23, 24, 25, 2008
REASONS FOR JUDGMENT
DAWSON J.
[1] The plaintiff commenced employment with the defendant as a salesman on June 15, 1998 in its Mississauga office. In September 2002 he was transferred to the defendant’s office in Concorde, Ontario. On July 26, 2004 he was promoted to branch manager of the defendant’s Kitchener office. On May 16, 2005 his employment came to an end at a private meeting with Clarence Morrison. Mr. Morrison is a Vice-President of the defendant, and is in charge of its Canadian operation. He was the plaintiff’s immediate supervisor at that time.
[2] Mr. Defaria and Mr. Morrison both testified and each gave a very different account of what transpired during the May 16, 2005 meeting. The plaintiff says he was fired in a very disrespectful manner. Mr. Morrison says the plaintiff resigned and denies any disrespectful conduct. There were no other witnesses to what transpired during the meeting.
[3] There is no suggestion that the defendant had cause for dismissal. The first issue is whether the plaintiff was fired, (and therefore wrongfully dismissed), or resigned. Should I find he was wrongfully dismissed the second issue relates to the notice period and the quantum of damages.
The Evidence
[4] Before resolving the conflict about what happened at the May 16, 2005 meeting, I will summarize some of the evidence. The evidence from Mr. Defaria and Mr. Morrison about what happened during the critical meeting consumed only a small fraction of the time at trial. Most of the trial was devoted to a painstaking review of the background facts and surrounding circumstances. There is no dispute about the chronology of the main events, or the basic background facts. However, there are numerous disputes about some of the details and their significance.
[5] The defendant is in the business of renting and leasing transport truck trailers and similar equipment throughout the United States, and in some parts of Canada. The company’s headquarters is in St. Louis, Missouri. Clarence Morrison became Vice-President in charge of the Canadian Region when XTRA purchased a Canadian company named Caravan, where Mr. Morrison was employed. Clarence Morrison was commonly referred to at work as “Clem.”
[6] The plaintiff was initially employed as a salesman and had a branch manager as his immediate supervisor. However, once he became a branch manager he reported directly to Mr. Morrison. The plaintiff was commonly referred to at work as “Duke.”
[7] Mr. Defaria claims that throughout his tenure as a salesman and as a branch manager, he had trouble getting timely pricing information from Mr. Morrison. While the company published a price book, this was based on conditions in the U.S. market. There is evidence that the Canadian market was more competitive and that salesmen and managers often had to approach Mr. Morrison to obtain approval for discounts. On occasion Mr. Morrison had to seek approval from head office in St. Louis. Delays in the pricing process could result in the loss of business to competitors.
[8] The plaintiff maintains that he had more trouble than others in getting pricing from Mr. Morrison. Mr. Morrison denied that, and claimed that Mr. Defaria got prices when he did. The plaintiff testified that he was never sure when he called Mr. Morrison whether he would get the “nice Clem” or “the yeller,” and consequently he did not have good communications with Mr. Morrison. He felt Mr. Morrison treated him unfairly and did a number of things over a period of time that prejudiced his success, impacted negatively on his commissions, and made it more difficult for him to meet his quotas and objectives.
[9] In January 2004 the defendant published and distributed its updated business conduct and ethics policy. Mr. Shawn Hughes is the Vice-President of Human Resources at XTRA and is based in St. Louis. He testified that the updated policy was distributed in response to legislation in the United States enacted following the Enron scandal. XTRA’s parent corporation published a similar policy and also established an ethics hotline. Each employee was required to sign off on the ethics policy. That policy stated that failure to notify supervisors or the ethics committee of violations could result in discipline up to and including dismissal. The policy provided that all complaints would be treated as confidential. Mr. Hughes was a member of the ethics committee.
[10] On April 12, 2004, the plaintiff sent a written complaint about Mr. Morrison to the ethics committee. That report contained details of four specific allegations. On April 24, 2004, Shawn Hughes and XTRA’s associate legal counsel, Jim Arnold, had a conference call with the plaintiff to discuss the allegations. Mr. Hughes testified about the investigation that was undertaken by the committee. The committee ultimately concluded that the plaintiff’s concerns were primarily of a business and not an ethical nature. To the extent ethical questions were raised, they were not well founded. Many of the plaintiff’s complaints related to delays in pricing, and reflected a lack of communication between Mr. Defaria and Mr. Morrison. Shawn Hughes testified that the plaintiff’s complaints were treated as confidential and were not revealed to Mr. Morrison.
[11] On February 4, 2005, Mr. Defaria again wrote to the ethics committee complaining about Mr. Morrison. Shawn Hughes testified that once again the committee concluded the complaint was not really of an ethical nature. There was a conference call with Mr. Defaria on March 9, 2005, to discuss his complaint. On the same day Shawn Hughes spoke to Mr. Morrison and gave him some information about the plaintiff’s concerns, although he testified he was careful not to disclose that it had come forward as an ethics complaint.
[12] Mr. Hughes testified that the plaintiff seemed to feel he was being discriminated against by Mr. Morrison. This did not make sense in Mr. Hughes view, because Mr. Morrison had promoted the plaintiff to branch manager in July 2004.
[13] On March 17, 2005, eight days after Mr. Hughes told Mr. Morrison of the plaintiff’s concern, Mr. Morrison conducted Mr. Defaria’s annual performance review. He found that the plaintiff’s performance met expectations, but commented that revenue was down at the Kitchener branch. He concluded that he would meet with the plaintiff every 60 days to review the plaintiff’s progress towards achieving his goals. He also removed one of the plaintiff’s largest accounts, the Sears Line Haul account.
[14] The plaintiff testified that he felt the review was negative and that he was being penalized by the removal of his biggest account. Mr. Morrison testified that the review was fair, and Mr. Hughes testified it was not out of the ordinary. Mr. Morrison referred to the fact that the Sears Line Haul account was located in Kingston, far from the Kitchener branch. Mr. Defaria testified the account had been his for five years. He had a farm property in the Bellville area where he spent weekends, and he serviced the account on Fridays and Mondays. Mr. Morrison maintained that servicing the account from Kitchener would have a negative effect on the plaintiff’s management of the Kitchener branch. He did agree that the removal of the account negatively impacted on the plaintiff’s revenue.
[15] The plaintiff argues the result of the performance review was a reprisal. He felt that Mr. Morrison knew of his complaints to the Ethics Committee. Mr. Morrison denied using the performance review as a reprisal.
[16] On May 4, 2005, Mr. Defaria sent an email to Shawn Hughes in St. Louis. This was not a formal ethics complaint. In it he alleged that Mr. Morrison had delayed in getting him pricing for a significant potential contract with The Beer Store. It turned out that Mr. Morrison had failed to send the pricing request to St. Louis. Mr. Morrison admitted to Mr. Hughes that he made a mistake. Mr. Hughes spoke to Mr. Morrison about this complaint on May 9, 2005. A conference call was scheduled for May 12, 2005. Mr. Morrison was to be on that call together with Mr. Hughes and the plaintiff. Mr. Hughes wanted Mr. Morrison and Mr. Defaria to resolve what he considered to be a business communication problem between them.
[17] The May 12, 2005, call was rescheduled to Friday May 13, 2005. However, Mr. Morrison was not available on May 13, and the call went ahead without Mr. Morrison.
[18] During the May 13, 2005 call Mr. Hughes expressed a concern that the plaintiff was repeatedly contacting him with business related problems. He stressed that Mr. Defaria and Mr. Morrison had to resolve the communication problem between them. Mr. Hughes also testified that he was very direct with the plaintiff and suggested that if he could not resolve matters with Mr. Morrison he may wish to consider obtaining other employment. However, Mr. Hughes was clear that he did not plan to terminate the plaintiff’s employment. He felt the relationship between the plaintiff and Mr. Morrison was “very salvageable.” He told the plaintiff to speak to Mr. Morrison.
[19] When the conference call ended it was late on a Friday afternoon. Due to the time difference between St. Louis and Toronto, Mr. Hughes testified that he was not able to reach Mr. Morrison to tell him the results of the call. However, Mr. Hughes telephoned Mr. Morrison first thing on Monday May 16, 2005, and told him to meet with the plaintiff.
[20] Mr. Morrison then telephoned the plaintiff at the Kitchener office at about 9:00 a.m. and asked him to come to the regional office for a meeting. The plaintiff testified that he was nervous and thought he might be fired. He took his time in order to calm himself. He arrived at the regional office at approximately 11:00 a.m. Mr. Morrison agreed this was the time of arrival. Both agree that the plaintiff entered Mr. Morrison’s office and the door was closed. I note that another senior manager, Jerry Degrace, was available but he was not asked to sit in on the meeting.
[21] Mr. Defaria and Mr. Morrison agree that the first topic of discussion was the delay in providing pricing for The Beer Store. That took a few minutes. After that Mr. Defaria and Mr. Morrison gave very different accounts of what transpired.
The Plaintiff’s Testimony
[22] The plaintiff testified that from the outset it was obvious Mr. Morrison was annoyed that the plaintiff had gone over his head. Mr. Morrison said two or three times, “you should have come to me.” Mr. Morrison then said: “You have a bulls-eye on your back and I have the gun.” He began to swear and called the plaintiff a “fucking low life.” He continued to use the “F word.” He repeatedly demanded to know what else the plaintiff had complained about to Mr. Hughes. The plaintiff testified that he refused to discuss that due to the confidentiality provision in the ethics policy. Mr. Morrison then got fed up and said, “Duke you’re fired.” Mr. Morrison said the company would give the plaintiff a compensation package. He then continued to swear and demean Mr. Defaria. Mr. Defaria testified that after a few more minutes he got up and walked out. He had already been fired and did not want any more abuse.
[23] The plaintiff testified that he walked out to the parking lot. He heard Mr. Morrison come out behind him. He did not want any trouble and so he turned and handed Mr. Morrison the keys to the Kitchener office. Mr. Morrison then asked about the plaintiff’s laptop computer. He told him it was at the office and that he did not have any other company property. Mr. Morrison then said to him: “If you say anything about me I’m going to kick the fucking guts out of you.” The plaintiff did not respond but walked to his car. As he got in the car Morrison said: “Hey Duke – you quit, I didn’t fire you.” At this point I would observe that Mr. Hughes testified that Mr. Morrison had no authority to fire Mr. Defaria without his approval.
[24] Mr. Defaria testified that he was very upset and immediately called his wife. She told him to call Shawn Hughes. He testified he then immediately called Shawn Hughes and told Mr. Hughes exactly what had happened.
[25] Shawn Hughes testified that he could not recall whether or not he got such a call. In cross-examination he was very clear that he could not say one way or the other, although he had a clear recollection of everything else surrounding these events. I find this aspect of Mr. Hughes’ testimony to be troubling and not in keeping with common sense. I do not accept this part of his evidence.
Mr. Morrison’s Testimony
[26] Mr. Morrison testified that “not a whole lot” happened at the meeting. He told the plaintiff that the delay in providing The Beer Store pricing was his fault. Mr. Defaria did not say much. He then asked Mr. Defaria if there were any other issues. The plaintiff said there were none. Mr. Morrison testified that he indicated Mr. Hughes said there were more. Mr. Defaria made no response. Mr. Morrison pressed further and testified he raised the “I Wheel’s International” account. The plaintiff said either that he was not prepared to discuss it or that he had been advised not to discuss it. Mr. Morrison told the plaintiff he was asked to sort it out and they needed to do that. The plaintiff again said he was not prepared to discuss it. Mr. Morrison told the plaintiff to lift up his head and look at him and the plaintiff did. Mr. Morrison denied that he was swearing or angry. Mr. Defaria then said, “I’m not going to quit but you can fire me.” The plaintiff then got up and walked out. Mr. Morrison testified he was stunned, but got up and followed the plaintiff. In the parking lot the plaintiff handed over his office keys and said his laptop was on his desk. Mr. Morrison testified he asked the plaintiff if he was quitting, but there was no response. Mr. Morrison denied making any threats. The plaintiff walked to his car and drove away. Mr. Morrison went to his office and telephoned Mr. Hughes. Shawn Hughes remembers receiving that call.
[27] The next day Mr. Morrison sent an email to Mr. Hughes detailing what had occurred. In it he wrote that he told the plaintiff he had been advised of a pricing complaint regarding the I Wheels International account, and that the plaintiff refused to discuss it. Other evidence demonstrates that “I Wheels” was not the plaintiffs account and never had been. The plaintiff had never made a complaint about that account to Shawn Hughes.
The May 18, 2005 Letter
[28] On May 18, 2005, Shawn Hughes sent a letter to the plaintiff’s home address by courier. In it he indicated surprise at what had occurred. He stated that if the plaintiff did not return to work by May 20, 2005, XTRA would assume he had resigned.
[29] Mr. Defaria testified the letter was received by his mother at his home on May 19, 2005. However, he did not receive it because he had gone to his farm property in the Bellville area. He testified that his mother does not read or speak English well, and she did not tell him about receiving the letter until he returned home on May 25, 2005. I accept this evidence.
[30] The plaintiff testified he had given his cell phone number to Shawn Hughes, and that Mr. Hughes said he would contact him. Shawn Hughes agreed he did not call Mr. Defaria and that the letter was the only effort he made to contact him.
[31] It is agreed that the plaintiff’s lawyer responded to the May 18, 2005, letter in a letter dated June 6, 2005. That letter was addressed to Mr. Morrison. It contained a request for a letter of reference. Shawn Hughes testified that he would have written a letter of reference if he had been asked to, but testified he never received a request. Mr. Morrison was at first vague about whether he saw the letter. He finally agreed in cross-examination that he did. He thought he would have sent it to Mr. Hughes but his evidence on this point was oddly vague.
Analysis
[32] I conclude it is unnecessary for me to resolve all of the conflicts in the evidence about the background and surrounding circumstances. Arguments can be made from this evidence that Mr. Morrison and Mr. Defaria each have reasons to dislike the other, and therefore have a motive to be less than candid. I have kept this carefully in mind.
[33] I have come to the conclusion that I do not accept Mr. Morrison’s testimony about what transpired at the May 16, 2005 meeting.
[34] The general tenor of Mr. Morrison’s evidence is that he treated the plaintiff like any other employee. Mr. Morrison had promoted Mr. Defaria to branch manager in July 2004. In addition, the plaintiff had been able to achieve sales of one million dollars a year in the past. For these reasons the defendant argues it is not logical to think that Mr. Morrison would have treated the plaintiff as the plaintiff said he did.
[35] At this point I must refer to the evidence of Vaughn Pipe. Mr. Pipe was the manager of the defendant’s Mississauga office before his resignation in June 2004. He had been the plaintiff’s direct supervisor for a time. I fully accept Mr. Pipe’s evidence. He impressed me as someone doing his best to be fair and balanced in the giving of his evidence. Shawn Hughes testified in cross-examination that if he would have been aware of Mr. Pipe’s evidence about Mr. Morrison’s behaviour, he would have investigated the plaintiff’s complaints more fully in 2004 and 2005.
[36] Vaughn Pipe testified that Mr. Morrison was “to say the least strong handed.” He testified that the plaintiff was intimidated by Mr. Morrison. He described the relationship between Mr. Defaria and Mr. Morrison as intense. He testified that Mr. Morrison made fun of the plaintiff, and that Mr. Morrison once told him to tell the plaintiff to go back to one of his previous employers. Mr. Pipe further testified that Mr. Morrison also said the same thing to the plaintiff’s face at a sales meeting in front of other colleagues. He confirmed that Mr. Morrison often delayed in obtaining pricing, and that he seemed to prefer some employees to others. Referring to the plaintiff Mr. Pipe testified, “Duke’s pricing often came later than others.” He also testified that “Clem was making it very difficult” for the plaintiff to service one of his major accounts. When pressed in cross-examination Mr. Pipe testified that the common belief was, “if you crossed Clem you wouldn’t be at the company very long.”
[37] Mr. Pipe’s evidence, which I accept, goes a long way to destroying arguments to the effect that the credibility of Mr. Morrison’s evidence should be assessed on the assumption that he acted in a logical and businesslike fashion. In addition, aspects of Mr. Pipe’s evidence directly confirm important parts of the plaintiff’s evidence about how he was treated, and about how Mr. Morrison acted in the workplace.
[38] Having carefully reviewed the evidence of Mr. Morrison I also hold the view that he downplayed the significance of the need for sales people to obtain discounted pricing from him, or from St. Louis, and also his role in that process. It was also apparent during his testimony that Mr. Morrison remains annoyed about aspects of the plaintiff’s complaints. In addition, he was sometimes argumentative in cross-examination, in the sense that he would answer questions with questions, in circumstances where he was not seeking clarification. While demeanour is of limited significance in assessing credibility, I can only say that Mr. Morrison’s was not impressive. He seemed not to recall a number of matters that I would have expected him to. His portrayal of how he conducted himself was quite different than that provided by Vaughn Pipe. Mr. Morrison denied saying he wished the plaintiff would go back to his former employer. I accept Mr. Pipe’s evidence that he did say that.
[39] I would also observe that Mr. Morrison’s email to Shawn Hughes dated May 17, 2005 referred to the I Wheels International account being discussed at the meeting. The plaintiff testified that was not true. That was not his account and there was no reason it would be discussed. Vaughn Pipe confirmed that I Wheels International had been his account until he resigned, and that he left the account with Mr. Morrison. Shawn Hughes had not received a complaint about that account and would not have mentioned it to Mr. Morrison. Taken together these factors tend to support the plaintiff’s testimony that Mr. Morrison was pressing him for more information about his complaints, and also that Mr. Morrison falsified his emailed account of the meeting. He had a motive to do so because he did not have the authority to fire the plaintiff.
[40] I accept the evidence of the plaintiff. He was consistent in his evidence and readily admitted his dislike of Mr. Morrison. He was quite emotional when testifying about the meeting. He was appropriate in cross-examination with an even demeanour and was responsive to the questions. He was intimidated by Mr. Morrison. While he had reason to dislike Mr. Morrison, he had earned a good income working for XTRA for seven years. There is no evidence he had looked for employment elsewhere. I accept his testimony that he complained to the ethics committee because he felt he did not have any other outlet. That testimony makes sense against the background facts as I have found them to be. It is highly improbable that someone in the plaintiff’s position would not look for other employment before resigning. I conclude the plaintiff was fired, just as he said he was. I also accept his evidence that he was sworn at, called a “fucking low life,” threatened and treated with disdain.
[41] I will make brief mention of the evidence of the two other witnesses called by the defendant. Ms. Eva Smoluch was in the regional office on May 16, 2005. However, her office is separated from Mr. Morrison’s office by an empty office. She did not see the plaintiff, but concluded he had been in the office based on a comment made by Mr. Morrison. She was not paying careful attention as shown by the fact she thought the meeting took place at 9:00 a.m. Jerry DeGrace saw something of the events between Mr. Morrison and Mr. Defaria in the parking lot. His evidence is not inconsistent with the plaintiff’s account. I would also observe that his evidence fell far short of establishing that Mr. Defaria had cleaned out his office in Kitchener before attending the May 16, 2005 meeting. I have not overlooked any of this evidence in reaching my conclusions.
[42] The plaintiff has established on a balance of probabilities that he was wrongfully dismissed by the defendant.
Damages
[43] In determining an appropriate notice period on the particular facts of this case I have kept in mind the principles discussed in cases such as Bardal v. Globe & Mail Ltd., [1960] O.J. No. 149 (S.C.) and Wallace v. United Grain Growers Ltd. 1997 CanLII 332 (SCC), [1997] 3 S.C.R. 701.
[44] The plaintiff was 50 years of age when he was fired. He was a branch manager. He had been an employee of the company for seven years. The evidence demonstrates that the segment of the transportation industry in which he has always worked is relatively small. There are only five or six major companies operating in the Toronto area.
[45] The plaintiff testified that he was not able to find employment for four and one half months. He is now employed in a different segment of the transportation industry and earns considerably less than he previously did.
[46] The plaintiff testified that he did not submit applications to the major companies, because he had worked for them before. He gave satisfactory explanations for his decision not to do so. I also accept his evidence that he did not apply for Employment Insurance benefits because he was counselled that he would not be successful in obtaining them unless he could convince XTRA to change the record of employment to show that he had not resigned. That was not going to happen.
[47] I have had some concerns about whether the plaintiff did everything he could to mitigate his damages. However, the industry is small and the plaintiff had worked for most of the other major employers in the segment in the past. Given all of the evidence, including that the plaintiff took and continues in a much lower paying job after four and a half months of unemployment, I am not persuaded that the defendant has met its burden on the mitigation issue.
[48] Balancing the Bardal factors, I conclude an appropriate notice period is nine months. However, in this case, having regard to the very nasty and disrespectful way in which the plaintiff was treated by Mr. Morrison, and to the fact that he was not provided with a letter of reference, which likely made it more difficult for him to obtain employment, I set the notice period at 10 months. This amounts to a one month increase in the notice period on the basis of the factors referred to in Wallace v. United Grain Growers, supra.
[49] The plaintiff and the defendant each provided a written calculation of damages. The base amounts used for calculation differ slightly. I have adopted the plaintiff’s figures. The plaintiff’s average annual income based on the last two years of his employment was $59,147.98 including benefits, or $4,929.00 per month. Consequently the plaintiff would have earned $49,290.00 in 10 months at XTRA. The plaintiff earned mitigation income at the rate of $1,930.21 from September 12 to December 31, 2005 and at the rate of $1,906.08 per month in 2006. The plaintiff calculates the total mitigation income earned during the 9 month notice period I arrive at before consideration of “Wallace factors” to be $9,616.01. In my view mitigation income should not be deducted from the one month increase in the notice period attributable to the “Wallace factors”: Jessen v. C.H.C. Helicopters International Inc. 2006 NSCA 81 (CanLII), (2006), 271 D.L.R. (4th) 659 (N.S.C.A.), at para. 41.
[50] The plaintiff shall have judgment against the defendant for $39,674.00, plus pre-judgment and post-judgment interest on that amount as provided for in ss. 128 and 129 of the Courts of Justice Act, R.S.O. 1990, Chapter 43, (as amended).
Costs
[51] The parties may exchange and file written submissions on costs within 20 days. Each may file a one page response within seven days thereafter.
___________________________
DAWSON J.
Released: February 6, 2008
COURT FILE NO.: CV-05-009644-SR
DATE: 20080206
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
DUARTE DEFARIA
Plaintiff
– and –
XTRA CANADA
Defendant
REASONS FOR JUDGMENT
DAWSON J.

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