Archive for October, 2010

Second chances after big-time mistakes

Is an employer obligated to trust an employee after a bad lapse in judgment?

By Jeffrey R. Smith (jeffrey.r.smith@thomsonreuters.com)

Employment and labour law is rife with cases where an employee was fired or disciplined for misconduct and then claimed the punishment was too harsh. Discipline can be a tricky thing to manage for employers, especially when mitigating factors such as length of service and the employee’s previous record come into play.

Sometimes employers can be vexed when the discipline is ruled to be too harsh by courts or arbitrators, despite the perceived seriousness of the misconduct. It can be hard to figure out what it takes to get fired or receive serious discipline, especially if the misconduct shakes the employer’s faith in the employee’s ability to do a good job.

How good does an employee have to be to deserve a second chance? How bad does misconduct have to be to warrant serious discipline? These are questions that can be difficult to answer.

Take the tale of a long-standing Canadian Border Services Officer who got into trouble with the law. He was a well-performing officer who received commendations and good reviews. However, one day in late 2006 after some trouble in his personal life, he went for a drunken tour in his vehicle and ended up hitting a motorcycle. The driver of the motorcycle was seriously injured, but the officer took off without checking if he was okay. The police found him at home, where he had continued drinking, and arrested him.

The officer was convicted of impaired driving causing bodily harm and leaving the scene of an accident. Though the Canada Border Services Agency (CBSA) had allowed him to continue to work after the initial arrest, once the convictions came down the agency felt it couldn’t trust him as an officer. His job had a lot of responsibility and had little supervision. In addition, as a peace officer he had the power to arrest drunk drivers — a crime which he was just convicted of.

Because of his good work record, the CBSA decided to demote the officer instead of fire him. However, an arbitrator said the officer’s record gave reason to think he could continue doing his job well, despite the severe lack of judgment displayed in the car accident, an ordered full reinstatement after a temporary demotion for disciplinary reasons.

Arbitrators and courts are there to evaluate circumstances and pass judgment on difficult situations. But are they in a position to determine whether an employer can truly trust an employee with significant responsibility after an incident where the employee showed extremely bad or careless judgment, especially if it resulted in a criminal conviction? Should a third party be able to tell an employer with whom to trust its business after such an incident, especially if it’s in the public eye?

Jeffrey R. Smith is the editor of Canadian Employment Law Today, a publication that looks at workplace law from a business perspective. For more information, visit www.employmentlawtoday.com.

When do employee safety violations become criminal?

The question of liability for employee actions is even more important when safety violations turn into criminal charges

 By Jeffrey R. Smith (jeffrey.r.smith@thomsonreuters.com)

Last month, I discussed liability of employers for the actions of their employees in the context of circumstances where individual employees, such as supervisors, were found liable for health and safety violations that led to injuries or death. (Read that blog here.) There have been many cases where both employers and employees have been charged in the wake of workplace accidents.

One workplace tragedy that’s been in the news is the Christmas Eve 2009 deaths of four Toronto construction workers and the serious injury of another after a scaffold on a highrise broke. The employer, Metron Construction, and the scaffold supplier were hit with a total of 34 charges under Ontario’s Occupational Health and Safety Act, and the director of each company and a supervisor were also individually charged with 27 violations.

There was recently another development in this tragic tale, as Metron and three individuals were criminally charged in relation to the deaths, including criminal negligence causing death and criminal negligence causing bodily harm. The charges came under Bill C-45, which allows criminal charges to be laid in workplace accidents but has been little used since it came into effect in 2004.

Though the bill has been praised as a step towards making workplaces safer by pushing employers to be more safety-conscious out of fear of harsher criminal penalties, it makes the question of liability more important. Since employers can’t necessarily control the actions of individual employees who cause unsafe conditions at work, should they be even less liable if those actions turn out to be criminal?

An employer should do what it can to ensure a safe workplace, but if an employee acts in an unsafe manner without the employer’s knowledge, shouldn’t this reduce the employer’s liability? And if the employee’s actions are found to be criminal, how much responsibility should the employer have? It can do some things to ensure a safe workplace, but only so much. An employer can’t expect an employee to act criminally at work, can it?

In the scaffolding case, it was evident the employer had some responsibility in ensuring it had the right equipment and procedures. But what if it had done so and its employees deliberately ignored safety procedures and caused the conditions that resulted in the tragedy? It can take measures afterwards, but by then it may be too late. Can an employer expect to know what its employees will do at work, especially if the conduct turns out to be of a criminal nature?

Jeffrey R. Smith is the editor of Canadian Employment Law Today, a publication that looks at workplace law from a business perspective. For more information, visit www.employmentlawtoday.com.

What are the restrictions on restrictive covenants?

Courts may recognize an employer’s right to protect its interest, but there is plenty of room for interpretation when it comes to what is reasonable and fair

By Jeffrey R. Smith (jeffrey.r.smith@thomsonreuters.com)

When an employee leaves a company for another employer, particularly a competitor, it’s understandable if the former employer is a little nervous, especially if the employee held an important position.

While seeing a competitor benefit from gaining talent at its expense can be a tough pill to swallow, the biggest concern could be the knowledge the employee takes with her. If she has access to confidential and sensitive information, it makes sense for the employer to take steps to protect it.

But how far can an employer go to protect its interests? Employers are learning that, often, it’s not as far as they think and they’d better be very specific when creating that protection.

In early 2009, the Supreme Court of Canada released what has become a well-known decision in the area of restrictive covenants in employment contracts. Morley Shafron had signed an agreement with his employer, KRG Insurance Brokers, that stipulated if he left the company, he couldn’t work in the insurance brokerage business in “the Metropolitan City of Vancouver” for three years. The British Columbia Supreme Court, and later the Supreme Court of Canada, found the restrictive covenant was too broad to be enforceable as it didn’t define a specific area. “Metropolitan Vancouver” was not an entity and could not be assumed to include nearby cities such as Richmond, B.C., where Shafron began working as an insurance salesman.

In 1998, the B.C. Supreme Court set out some rules as to what would make an enforceable restrictive covenant:

•the covenant protects a legitimate proprietary interest of the employer
•the restrictions in the covenant are reasonable in terms of duration, scope, nature of activities prohibited and overall fairness
•the terms of the restriction are clear and certain
•the restrictions are reasonable with reference to the public interest.

While it seems courts may recognize an employer’s right to protect its interest, there can be a lot of interpretation when it comes to what is reasonable and fair. In many cases, employers try to prevent employees from working for a competitor for a certain period of time, but it seems unlikely this kind of restriction would hold up to a court’s scrutiny.

The Alberta Court of Appeal recently determined three employees who left one oil equipment transportation company for another were not bound by confidentiality and non-disclosure agreements — other than normal fiduciary duty over confidential information they had access to in their jobs — because the agreements were unlimited in time and geography. It’s clear trying to prevent an employee from working specific types of jobs or using her knowledge anywhere and forever is unreasonable.

How far should employers be allowed to protect their interests? Should they be allowed to draft agreements preventing employees from working for a competitor in the same area? Or should employees have the freedom to work where they want when they want, regardless of a piece of paper they sign and the information they might have about their old employer?

Jeffrey R. Smith is the editor of Canadian Employment Law Today, a publication that looks at workplace law from a business perspective. For more information, visit www.employmentlawtoday.com.