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Acumen v Ojanen: Just Cause And The Potential Costs Of An Unfair Dismissal

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Acumen Law Corporation v. Ojanen, is a recent B.C. Supreme Court decision that clarifies: (1) what type of employee misconduct does not constitute just cause for dismissal; and (2) what actions, taken by an employer in the course of termination, can lead to a finding of aggravated damages against the employer.

Acumen concerned the termination of Melissa Ojanen ("Ms. Ojanen"), an articling student at Acumen Law Corporation ("Acumen"), which specializes in the defence of criminal and regulatory driving-related offences. Ms. Ojanen worked at Acumen for 3 months before starting the Professional Legal Training Course ("PLTC") to fulfil her licencing requirements to practice law. Acumen terminated Ms. Ojanen's employment in front of her classmates during PLTC, and served her with claims for breach of contract, theft, wrongful use of marketing materials, and trespass. Ms. Ojanen counterclaimed for wrongful dismissal.

The Court ultimately dismissed Acumen's claims and decided in favour of Ms. Ojanen, awarding her $18,934 in ordinary damages and $50,000 in aggravated damages.

Misconduct sufficient to constitute just cause

In defence of the wrongful dismissal claim and claim for punitive damages, Acumen alleged the following misconduct by Ms. Ojanen: (1) trespass; (2) theft; (3) disloyalty through attempted competition; and (4) permitting access to privileged and confidential materials.

The Court rejected Acumen's argument that Ms. Ojanen committed trespass by entering Acumen's office after hours without permission. It found that the owner of Acumen, Mr. Doroshenko, was aware that Ms. Ojanen was coming into the office outside of ordinary office hours to work and had never explicitly prohibited Ms. Ojanen from doing so.

The Court also rejected Acumen's claim that Ms. Ojanen committed misconduct by taking entire files containing confidential and privileged materials home without permission. Acumen did not inform her there was a rule against such a practice. Further, Ms. Ojanen used the files as a learning tool, which was not an improper purpose.

Acumen also claimed that Ms. Ojanen entered into improper competition with it by creating a law blog related to roadside prohibitions. Acumen runs a similar blog to market the firm's services. The Court found that the blog was not intended to compete with Acumen. Instead, the blog recommended readers seek professional legal advice at Acumen.

Finally, the Court dismissed Acumen's claim that Ms. Ojanen was guilty of misconduct sufficient to justify termination when she allowed her husband to view privileged information. As an articling student, Ms. Ojanen had an obligation to keep client confidences and to inform her employer about a breach, which she did not. However, Ms. Ojanen did not engage in an act of dishonesty that went to the root of the employment relationship. Instead, she was guilty of a serious error in judgment that did not rise to a fundamental breach of the employment agreement.

Conduct necessitating aggravated damages

The Court held Acumen's following conduct was unfair and unduly insensitive:

  1. Doroshenko dismissed Ms. Ojanen without giving her the opportunity to explain her involvement in the blog or her intentions – he simply concluded that she was seeking to compete with Acumen;
  2. The decision to serve Ms. Ojanen in front of her classmates was unnecessary and psychologically brutal;
  3. Acumen's accusations of dishonesty and deceit were unwarranted and unfounded;
  4. The obvious result of the lawsuit and complaint to the Law Society was to render her unemployable in the legal profession until the allegations were resolved; and
  5. Acumen perpetuated unfounded allegations against Ms. Ojanen over three years.

The Court emphasized that Mr. Doroshenko was an established lawyer and Ms. Ojanen was a young woman without contacts in the legal profession. Accordingly, there was a severe power imbalance between them. In this light, Mr. Doroshenko's actions were disproportionate and constituted bullying.

Finally, Ms. Ojanen's dismissal caused profound emotional harm well outside the norm for dismissed employees. She was humiliated when she was fired in front of her class; she blamed the lawsuit for the break up of her marriage; she felt like an outcast in the legal profession; and, her unemployment caused her to be homeless for weeks. As a result, she experienced anxiety, depression, inability to focus, irritability and loss of appetite.

The Court awarded $50,000 in aggravated damages because Acumen's actions were unfair, unduly insensitive and resulted in Ms. Ojanen suffering emotional consequences exceeding the norm for dismissed employees.

The decision in Acumen is a good reminder for employers to (i) thoroughly and objectively investigate perceived misconduct; (ii) avoid responses to misconduct that are personal, vindictive, unprofessional, bullying or harassing, and (iii) avoid any other conduct that is unfair or insensitive in connection with ending the employment relationship. In fact, in some cases of misconduct, it may be more prudent to terminate on a without cause basis if the severance obligation to the employee is minimal.

Note: This a reprint of an article by McCarthy Tétrault Employer Advisor and Abigail Cheung of McCarthy Tétrault LLP.