Employee Walks Fine Line on Confidentiality Breach

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

Every employer is properly concerned about its reputation. But how far can an employer go to make sure that its “dirty laundry” stays hidden away? Can an employee be disciplined for discussing their employer’s private matters, or can an employer insist that “what happens at work stays at work”? Questions like these about an employee’s duty of loyalty and the consequences of a breach of confidentiality are central to the Alberta Labour Relations Board’s decision in Ann’s Day Care Ltd. v Michelin, 2020 CanLII 104967 (AB ESA).

Background

Sarah Louise Michelin worked at Ann’s Day Care Ltd. Ann’s had previously had an employment-related dispute with one of its former managers, Alice Dickie, which culminated in an employment standards complaint.

On November 23, 2018, Ms. Michelin attended her usual morning meeting with her supervisor, Jennifer O’Halloran, and the Executive Director, Corey Lavoy. Mr. Lavoy told them that Ms. Dickie’s employment standards case was done, and that the only contact that Ms. Dickie should have about the matter should come from the Employment Standards office. He told both women that nothing they were discussing about Ms. Dickie’s case should leave the room.

A few hours after the meeting, Ms. Michelin and her colleague, Briel Bulycz, went out for lunch near another day care, the Treehouse Daycare, where Ms. Dickie now worked. After lunch, Ms. Michelin suggested that she and Ms. Bulycz stop in at Treehouse and say hello to Ms. Dickie. The three of them chatted in private and their friendly discussion turned to Ms. Dickie’s “court case,” meaning Ms. Dickie’s own Employment Standards dispute with Ann’s. According to Ms. Bulycz, Ms. Dickie revealed how much money Ann’s owed her, and she and Ms. Michelin laughed and joked about how angry that would make the owners, Mr. Lavoy and his mother, Ann Lavoy. Ms. Bulycz felt uncomfortable about the exchange she had just witnessed. On her return to Ann’s that afternoon, she told Ms. O’Halloran, about it. She, in turn, told Mr. Lavoy.

Mr. Lavoy wanted to get Ms. Michelin’s side of the story. When confronted with the allegations, she explained her contact with Ms. Dickie as simply a wave through the window. She then gave contradictory explanations which caused Mr. Lavoy to ask her for a written statement. The account she provided 20 minutes later confirmed to Mr. Lavoy that Ms. Michelin had instigated a conversation with Ms. Dickie against his express direction and that she had initially lied to him about what had happened at the Treehouse.

Management decided to terminate Ms. Michelin’s employment, citing a breach of confidentiality and a lack of trust as a result. In 2014, Ms. Michelin had signed a Confidentiality Agreement in which she committed to “keep the business activities of Ann’s Day Care strictly confidential” and in which she acknowledged that “unauthorized disclosure of company information is considered a serious breach of conduct and will result in disciplinary action up to and including dismissal.”

This matter came before the Board when the employer challenged an Appeals Officer’s order that the employer pay the employee $2,794.19 in termination pay. At issue before the Board was whether the employee, Ms. Michelin, was terminated from her employment for just cause. In the absence of just cause, the appropriate amount of termination pay owing to Ms. Michelin had to be determined.

The Board’s decision

The Board began its analysis by noting that for Ms. Michelin’s conduct to amount to a breach of confidentiality, the information about Ms. Dickie’s Employment Standards complaint had to be considered “confidential.” On this point, there was a distinction to be drawn between, on the one hand, information about the complaint that Ms. Michelin obtained from Ms. Dickie, and, on the other hand, information that Ann’s shared with Ms. Michelin about the complaint.

The Board was satisfied that during the morning meeting, Mr. Lavoy shared that Ann’s would have to pay Ms. Dickie more money since she was successful in her complaint. It was also satisfied that Ms. Michelin understood that “what was said in the meetings was to stay in the meetings.” Therefore, the information at issue was “confidential information” that Ms. Michelin knew or should have known was not to be discussed.

Next, the Board examined what was actually discussed at the Treehouse that day. At no time did Ms. Michelin expressly disclose what Mr. Lavoy told her earlier that day. She did not disclose that she knew that Ms. Dickie’s complaint was finished, or that Ann’s owed her more money.

The trouble was that in asking Ms. Dickie whether she had heard from “Labour Standards,” she did what Mr. Lavoy asked her not to do. However, her attempt to elicit this confidential information from Ms. Dickie was different than if she had disclosed it herself. The Board opined that it would be stretching the notion of disclosure of confidential information too far to say that Ms. Michelin had disclosed confidential information. In the end, the Board determined that Ms. Michelin’s culpability was limited to her ignoring Mr. Lavoy’s express direction not to speak with Ms. Dickie about the complaint.

However, the Board was not prepared to accept Ms. Bulycz’s allegation that Ms. Michelin told Ms. Dickie that Ann’s was “going under” and that Ms. Michelin was looking for a new job. Information about the employer’s financial viability was “confidential information.” However, the evidence in this respect was comprised of various levels of hearsay and therefore it held no weight with the Board.

As for Ms. Michelin’s initial lack of candour with Mr. Lavoy about what she had done, the Board recognized that employees who are confronted with wrongdoing “may be taken off guard or attempt to paint themselves in the best light in response to employer concerns.” Even though Ms. Michelin was initially dishonest, her accurate written account should have restored some of the employer’s trust.

On balance, given the lack of any prior discipline on file, the Board was satisfied that there was an insufficient basis for dismissal. The penalty was seen to be unreasonable in light of the evidence of another employee’s breach of confidentiality (in different circumstances) going unpunished. However, some discipline was held to be warranted for the flagrant disregard of her employer’s directive not to discuss the complaint. Summary dismissal was simply too draconian a punishment.

The decision ended with a consideration of Ms. Michelin’s length of service. The parties disagreed about whether a leave of absence in 2014 was a break in service which would affect the amount of termination pay. Since the leave was for less than 90 days, a legislative provision bridged the gap. Ms. Michelin was therefore entitled to eight weeks of termination pay, as she was employed by Ann’s for 10 years or more.

Takeaways

Trust is at the heart of any employment relationship. Many enterprises, like hospitals, law enforcement agencies, schools and other workplaces, as keepers of highly sensitive information, depend on their employees’ good judgment and ability to safeguard information. In other workplaces, financial information and private human resources-related matters are shared internally on a confidential basis. An indispensable means of maintaining confidentiality is a carefully drafted and consistently applied policy on the subject. Employers should reinforce their policies by providing their employees regular education sessions and refreshers.

This case also highlights the seriousness of a dismissal. As the most “draconian” of measures, it should be used judiciously and as a means of last resort. In cases where an employee has come clean and taken responsibility for his or her misconduct, an employer should question whether its trust in the employee has been irremediably broken, or whether the employee can be rehabilitated through a less severe disciplinary measure.

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