Court Awards Aggravated Damages in Wrongful Dismissal Case

By Daniel Standing LL.B., Editor, First Reference Inc.

The case Acumen Law Corporation v Ojanen, 2019 BCSC 1352 (CanLII) tells the story of the abrupt and acrimonious end of an articling student’s employment with a law firm. The court rejected the range of factors purported to support just cause and, in addition to ordinary damages for breach of contract, awarded the employee aggravated or moral damages because of the way she was fired. The case serves as an important reminder to employers about the seriousness of misconduct required to support just cause, and should also encourage employers to think twice before otherwise carrying out a brutally insensitive termination.

Background

Melissa Ojanen was hired as an articling student at Acumen Law Corporation (Acumen), a boutique law firm specializing in “driving law,” which includes the defence of criminal and regulatory offences committed while driving. She was hired in 2016 by Paul Doroshenko, a lawyer and sole proprietor of the firm. She was to complete a 12-month period of articles which would be interrupted by the 10-week Professional Legal Training Course (PLTC).

Ms. Ojanen began working for Acumen in May 2016 and was dismissed by Mr. Doroshenko a little less than four months later for breach of contract, theft and wrongful use of marketing materials belonging to Acumen, and trespassing by entering into Acumen’s premises after hours without permission. Ms. Ojanen denied any misconduct as alleged and claimed against Acumen and Mr. Doroshenko for wrongful dismissal. She sought damages for breach of contract, bad faith conduct, mental distress and aggravated damages.

Mr. Doroshenko’s decision to terminate the plaintiff’s employment stemmed from his discovery of a website named “BC Driving Prohibitions Blog” which offered information to people facing a driving prohibition. Similar blogs were maintained by Acumen which Mr. Doroshenko considered a key part of the firm’s marketing efforts.

The court’s analysis

The court began its analysis by considering whether Acumen and Mr. Doroshenko were entitled to the injunctive relief they sought against Ms. Ojanen. Specifically, they claimed the return of data and material allegedly stolen from Acumen, a permanent injunction prohibiting Ms. Ojanen from marketing legal services using data or material obtained from the firm and a prohibition on her using the web domain name, “roadsideprohibitions.com” or anything similar. They also sought punitive damages against Ms. Ojanen.

The court concluded that the claims for injunctive relief against Ms. Ojanen were unsuitable. Justice Gomery accepted Ms. Ojanen’s evidence that she was no longer in possession of material belonging to Acumen or its clients, and that the blog ceased to exist after September 2017. Having failed to complete the PLTC and her articles, she did not work at a law firm since her employment with Acumen ended and she was not in a position to compete with Acumen. Also, the court determined that the claim for punitive damages failed for reasons the court would canvass in relation to Ms. Ojanen’s claim for wrongful dismissal. As such, the court dismissed Acumen and Mr. Doroshenko’s action against Ms. Ojanen.

The court then turned its attention to the question of whether Ms. Ojanen committed misconduct constituting just cause for termination of her employment. Relying on jurisprudence, the court stated that just cause must be based on misconduct amounting to a fundamental breach of the contract, with the onus of proof lying on the employer. Acumen and Mr. Doroshenko alleged eight circumstances in support of just cause for termination. Forming the bulk of its decision, the court considered each allegation in turn.

First, the court considered whether Ms. Ojanen entered Acumen’s premises after hours and without permission. The court considered the evidence and concluded that in coming into Acumen’s office after hours on specific dates, Ms. Ojanen was not a trespasser and it was reasonable for her to infer that she had permission to enter the office.

Second, the court determined that a failure to attend a scheduled court appearance in June 2016 was a “trivial incident” arising from a misunderstanding of scheduling protocol which caused no prejudice to the client’s interests. As such, no misconduct occurred.

Third, as to whether Ms. Ojanen engaged in disloyal and troublemaking activity at an office party, the court heard evidence that while intoxicated, Ms. Ojanen grumbled about her salary and made accusations that a co-worker was trying to seduce her husband. On this point, the court determined that the employer’s decision to suspend Ms. Ojanen for this incident was something short of termination and showed that the employer had condoned this particular incident and could not rely on it to support the termination.

Fourth, it was alleged that Ms. Ojanen was insubordinate on August 8, 2016. On that date, Mr. Doroshenko met with her and, without giving her a chance to explain her conduct at the party, suspended her and told her to go home and review her articling agreement. Ms. Ojanen did not immediately leave the office but instead tried to engage coworkers in conversation about what had happened. Justice Gomery concluded that this incident could not be seen as a repudiation of her obligations as an articling student; rather, it was an understandable response to Mr. Doroshenko’s treatment of her at the meeting.

Rejecting the fifth allegation that Ms. Ojanen avoided responsibility at work and demonstrated that she was unfit to practice law, the court censured Mr. Doroshenko for invoking a “sexist stereotype of female incompetence” in his evidence. Furthermore, the court noted that Ms. Ojanen received positive feedback from Mr. Doroshenko about the quality of her work.

Next, the court rejected the allegation that Ms. Ojanen possessed materials that belonged to Acumen or its clients without her permission. The court found that not only did Acumen not have a rule made known to Ms. Ojanen that she should not take file materials or client materials home, it found that the files she took home were in furtherance of her purpose as an articling student of educating herself to be a competent lawyer in the fields of law that Acumen practiced.

Seventh, the employer alleged that Ms. Ojanen had entered into competition with Mr. Doroshenko and Acumen by creating the driving prohibition blog and, as such, had breached her duty of loyalty with her employer. The evidence established that Ms. Ojanen participated in the creation of the blog alongside her then-husband. However, the court concluded that there was no evidence to show that Ms. Ojanen had entered into competition with Mr. Doroshenko and Acumen through the blog. Furthermore, absent any prior communication to Ms. Ojanen that she was not to have any web presence as an employee of the firm, her actions were not considered misconduct warranting immediate termination.

The eighth and last allegation was that Ms. Ojanen permitted her then-husband access to privileged materials of Acumen’s clients and confidential firm materials and failed to notify Mr. Doroshenko of the breach of privilege. Ms. Ojanen admitted the allegation and conceded the breach of privilege. The court characterized her actions as a serious error in judgment instead of as an act of dishonesty jeopardizing the employment relationship.

Justice Gomery found that viewed separately or together, the complaints alleged to be just cause for termination were insufficient to warrant a dismissal. The court found that there was no dishonesty or equivalent conduct that would cause a breakdown of the employment relationship. Having determined that the dismissal was unjust, the court turned its focus to the issue of damages.

The court stated that ordinary principles of damage assessment in contract apply to an action for wrongful dismissal with the added component of potential aggravated or moral damages if the manner of the dismissal and its personal effect on the employee warrant such an award. In this case, Ms. Ojanen’s ordinary damages were assessed at $18,934 which was the sum she would have been paid for the remainder of her contract with the firm. Nominal damages of $10 were awarded in respect of the breach of the standalone Articling Agreement. Concerning aggravated or moral damages, the court noted that bad faith conduct must be shown to have an effect on the plaintiff that is greater than the normal distress and hurt feelings resulting from dismissal. In this case, the court pinpointed a handful of factors showing “unfair and unduly insensitive” conduct on the part of Acumen and Mr. Doroshenko. These factors included the decision to dismiss Mr. Ojanen based on her presumed involvement with the blog without asking her about it, the accusations of deceit and dishonesty based on unfounded suspicions, and the psychologically brutal decision to serve the lawsuit to Ms. Ojanen in front of her classmates at the Professional Legal Training Course. The court highlighted the power imbalance between the parties and concluded that Mr. Doroshenko took a disproportionate and bullying approach to making an example of Ms. Ojanen, instead of merely firing her. The court concluded that in acting as they did, Acumen and Mr. Doroshenko were unfair and acted in bad faith in the way they dismissed Ms. Ojanen. These actions caused Ms. Ojanen to suffer serious and prolonged emotional distress: The initial shock and distress caused her to fail her legal training course. She blamed the dismissal and lawsuit for the breakup of her marriage, a brief period of homelessness and her difficulty in obtaining other employment. The court reasoned that a substantial award of aggravated damages was warranted and awarded $50,000 to Ms. Ojanen as the victim of unfair, bullying and bad faith conduct by her former employer and former principal.

Takeaways for employers

The case serves as an important reminder to employers about taking a measured and proportionate approach to their employees’ misconduct. The case highlights the need for an employer to investigate problems as they surface instead of jumping to conclusions without affording those involved an opportunity to speak. If, on the basis of qualified legal advice, it is determined that just cause for dismissal exists in a given case, an employer’s actions may come under scrutiny if they go beyond what is reasonably required to effect the termination. As in this case, actions that are carried out in bad faith or are unduly insensitive will likely attract the censure of the court and create avoidable legal and financial liability for the employer.

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