In the recent case of Lake v. La Presse (2018) Inc., the Ontario Superior Court provided some useful guidance concerning an employee’s obligation to mitigate damages when there has been a wrongful dismissal.

In this case, the Plaintiff had been employed by the Defendant for 5.5 years. The employment was terminated without cause and there was no issue as to the fact that the Plaintiff was entitled to reasonable notice at common law.

The matter came before the Court as a summary judgment motion to determine the reasonable notice period, compensation for loss of a bonus over the reasonable notice period, and whether or not the Plaintiff took reasonable steps to mitigate her damages.

The particularly interesting aspect of this case has to do with the mitigation question.

In my experience, it is typical in these cases for former employees to produce evidence of unsuccessful job applications and leave it to the former employer to lead evidence at trial that, had more diligent efforts been made, the former employee would have become re-employed much sooner than actually was the case. Most employers find this to be an extremely difficult task.

In this case, the Plaintiff was the most senior employee in the Toronto division of a company that carried on business as a daily online French-language newspaper based in Montreal. The Plaintiff had ample experience working in sales and sales operations for media companies. She reported to the Vice-President of Sales and Operations of the Defendant, who was based in Montreal. Her duties included client development, training and management of sales teams, and developing and implementing the Defendant’s sales strategies. However, she did not attend weekly executive meetings or participate in setting strategic direction within the organization.

Her employment ended on May 30, 2019. At that time, she was 52 years of age. At the time of the motion, about two years later, she remained unemployed.

The Court noted that the onus is on the Defendant to demonstrate that the Plaintiff did not mitigate damages and that the onus is not a light one. However, where the Defendant overcomes that onus, the notice period can be reduced or eliminated altogether.

The Court pointed out that the Plaintiff was entitled, firstly, to some reasonable period of time before starting the job search in order to adjust to the situation and plan for the future, and secondly, to seek out reasonably comparable work for which she was qualified. However, after a reasonable period of attempting to find similar work, a Plaintiff must, at some point, lower her sights and take a lesser paying job, or use her skills in a perhaps unrelated industry.

Considering the Plaintiff’s position, the Court concluded that the Plaintiff should have been ready to begin her job search after a one-month adjustment period. In the year following the termination, she applied for 11 jobs, nine of which were for a vice president role, which was a more senior title than one that she had ever had. Accordingly, she focused her job search on a role that represented a promotion over her prior role.

The Court found that the appropriate notice period was nine months. In that time frame, the Plaintiff only applied for seven positions, six of which were a vice president role. Her first job application was submitted four and a half months after she stopped working for the Defendant.

Taking these facts into account, and apparently without any direct evidence from the Defendant as to available jobs, the Court concluded that the Plaintiff had failed to properly mitigate her damages. She should have started her search earlier, expanded the parameters of her job search, and applied for more positions in more junior roles. Accordingly, the period of reasonable notice to which she was entitled was reduced by two months. This case provides the useful reminder as to the seriousness with which the search for alternate employment must be pursued. It also demonstrates that while the onus to prove a failure to mitigate is always on the Defendant, that onus can be met if the Plaintiff can be shown to have acted unreasonably and without proper diligence.

Our new reality over the last year and a half has meant that in large measure, documents of all kinds have been signed electronically rather than in person – including sworn documents to be filed in Court. But what if someone denies having “signed” an electronic document?

In Ontario, the Electronic Commerce Act, 2000, provides for the legal recognition of electronic information in documents. While there are exceptions, such as wills and codicils as well as powers of attorney relating to an individual’s financial affairs or personal care, for the most part, the Act provides that an electronic document will be as effective as an originally-signed paper document provided that the electronic signature is reliable for the purpose of identifying the person, and the association of the electronic signature with the relevant electronic document is reliable. The Act does not specify how reliability is established. If some doubt can be raised as to the reliability of the application of an electronic signature, the document may be rendered invalid.

The question of how one can best assure reliability was recently addressed in the Texas Supreme Court case of Aerotek, Inc. v. Boyd. In Texas, legislation similar to that of Ontario is provided by the Texas Uniform Electronic Transactions Act, which provides that an electronic signature is attributable to a person by showing the effectiveness of the security procedures in place when the document was electronically signed.

In Aerotek, Inc., a number of contractors were hired by the plaintiff through an online hiring application process. Upon request, the plaintiff sent the applicants an email that provided a link to a registration page. On that page, each applicant created a user ID and a password and set up security questions. Each time an applicant accessed the system, this information was required to be inputted.

As the process of making the applications developed, each applicant had to sign an Electronic Disclosure Agreement agreeing to be bound by electronic contracts as if they had been signed in writing.

The process could not be completed without all of the contracts involved in the process being signed electronically. As documents were signed, those actions were recorded electronically with a time stamp. The system was designed so that the plaintiff could not alter any of this information.

Ultimately, four applicants completed the process and were hired. They were terminated and proceeded to sue the plaintiff. The plaintiff responded by insisting that the disputes be referred to arbitration pursuant to an arbitration clause in one of the documents that had been electronically signed. Each contractor then denied ever having seen, signed, or been presented with the document containing the arbitration clause.

Accordingly, the Court had to determine whether or not the electronic signatures were valid.

The Court concluded that there would be several different ways in which a party relying on an electronic document could prove the connection between an individual and an electronic signature. This would include requiring personal identifying information to register for an account, assigning a unique identifier to a user, taking steps to prevent unauthorized access to electronic records, requiring users to complete all steps in a process before moving forward, and using time stamps to show when actions were completed.

In this case, the Court concluded that the security procedures used by the plaintiff were sufficient to demonstrate that the electronic signatures could be attributed to the four contractors notwithstanding their sworn denials about ever having seen, signed, or been presented with the relevant contract. Accordingly, where documents are to be exchanged electronically, it is important to establish security procedures along the foregoing lines in order to be able to demonstrate reliability as required by the Ontario statute. If there are any gaps in the process that might give rise to a question as to its reliability, the document may well be invalidated.

One of the advantages that I think I have as both a litigator and a mediator is that I get to use the knowledge that I have gained in one capacity to make me better at the other.

For example, as a mediator, I have seen counsel repeatedly make the same errors, often resulting in a mediation failing or at least making the task of achieving a settlement more difficult, time consuming, and expensive for all concerned. I try to be mindful of these things when acting as counsel on a mediation. In this post, in no particular order, here are seven major mistakes that I see all too often.

1. Failing to Put in Sufficient Thought and Effort into a Mediation Brief

All too often, I see mediation briefs that are little more than a reiteration of the party’s pleading. There may be one or two documents included as an afterthought. Presumably, the lawyer’s idea is to actually prepare for the mediation the night before, rather than a week before, when the mediation brief is prepared. This is completely unhelpful. By the time the case has reached mediation, at the very least, there should be an exchange of productions, if not completed examinations, for discovery. Thoughtful preparation is important. As in most cases, the more effort one puts in, the more likely something productive will emerge by the end of the process.

2. Not Preparing One’s Own Client for What to Expect from the Other Side

Most clients have great difficulty appreciating that theirs is not the only side of the story. This often can lead to extreme dismay and discouragement early in the mediation process. The client does not have to agree that their case has holes, but the client should certainly be aware of what is being said by the opposing side before the mediation starts.

3. Making Inflammatory Remarks

In mediations that I conduct, I try to discourage counsel from making opening statements or permitting their clients to do so. Nevertheless, in some cases I am overruled. Counsel, or the client, then proceeds to open the mediation by saying something that angers the other side to the extent that their cause immediately attracts two strikes against it. If your client wishes to vent, please do so in private, with me. If the client insists that the opposing side hear what they have to say, let me know in advance so that I can tell opposing counsel, who can then prepare their client.

4. Fighting Battles on Unwinnable Points

A wise senior counsel once said to me, “why fight a battle you can’t win?” There are those counsel who believe that the more arguments one makes, the more likely it is that one of them will stick. That is simply not true. Poor arguments are dismissed immediately and the lack of credibility attracted by the making of unwinnable arguments usually taints the valid arguments.

5. Being Unreasonably Tough, Thinking that there will be Time to Settle Later

The truth is that while there will be plenty of time after an unsuccessful mediation in which a settlement might take place, it is highly unlikely that there will be a better opportunity to settle. Furthermore, the client will have to spend a lot more money between the date of the mediation and the date that another settlement opportunity arises, which will have to be recouped in order to have made the delay worthwhile.

6. Making Offers that Both Counsel and His or Her Client Know to be Unrealistic

Making an obviously unrealistic offer does not communicate the idea that you are hard-nosed. Nor does it start the bargaining at a point that is high or low enough that the ultimate agreement, if there is one, will be based on a better number than it would have been if your initial offer been realistic. All it does mean is that you either don’t know what you are doing or are not serious about resolving the case. Stop wasting everyone’s time, and be realistic. You can stick to your guns if you like, but if you do make a ridiculous offer, all you will attract is an equally ridiculous counteroffer.

7. Failing to Educate Your Client About the Costs of Litigation Going Forward

When faced with obstinacy, I usually find it helpful to have a discussion with a lawyer and the client about anticipated costs going forward. I am often surprised that the numbers revealed are numbers the client had never been told. This is an error. Just as the client is entitled to your advice on the probabilities of success or failure in the case, they are entitled to a budget for the rest of the case, including trial, so that the client can factor this into his or her thinking about offers to be made or offers received.

In the recently-decided case of Czerniawski v. Corma Inc., Mr. Czerniawski’s employment was terminated without notice after 19 years of service because of alleged misconduct. The court had to address the question of whether or not the misconduct justified such an extreme measure.

Mr. Czerniawski was an assembler in a company that manufactured products in the corrugated plastic pipe industry. During his 19 years with the company, he was a good worker, and there had been no issues with his job performance. The only performance review he had ever received concluded that he was a solid, steady worker who was competent, dependable, and hard-working.

Unfortunately, Mr. Czerniawski had an angry exchange with a co-worker concerning items missing from his work station. There was evidence before the court that in the course of the encounter Mr. Czerniawski was screaming, pointing, and waving his arms. Both Mr. Czerniawski and the co-worker were angry, and voices were loud. There was no physical contact between these individuals and no threats were exchanged.

Mr. Czerniawski was asked to leave the workplace. He asked to be informed as to why he was being sent home, but no answer was provided and he refused to leave. The police were called in to escort him out of the building. He was told that his employer would conduct an investigation and that he was not to return to work until that process had been completed.

He went back to the workplace several days later to deliver a letter at the reception desk. The letter put forward Mr. Czerniawski’s side of the story.

Mr. Czerniawski was never consulted during the course of the investigation and when it was completed, Mr. Czerniawski’s employment was terminated without notice. Mr. Czerniawski then commenced this lawsuit, claiming that his employment had been wrongfully terminated and that he was entitled to reasonable notice of termination.

The trial judge had found that Mr. Czerniawski’s failure to go home when told to do so was insubordinate, but she also took into account the fact that he had asked why he was being sent home and that his question had not been answered.

She also felt that his attendance at the reception desk to deliver the letter was ill-advised, but noted that this had taken place four days after the incident had occurred, during which time no one from the company contacted him to discuss the issue or get his version of the facts. Furthermore, while he did go to the factory to deliver the letter, he made no attempt to go into the plant.

The trial judge concluded that had Mr. Czerniawski been permitted to respond to the allegations of misconduct with his side of the story as part of the investigation, the employer’s decision to terminate may have been different. In essence, she felt that the decision to terminate was out of proportion to the actual misconduct. As a result, she ruled that Mr. Czerniawski had been wrongfully dismissed and awarded damages equal to the notice to which he was entitled at common law.

There is no doubt that there are circumstances in which misconduct, including insubordination, can amount to just cause for termination without notice. The Supreme Court of Canada has made it clear that in arriving at this determination, the entire context must be considered. The misconduct has to be so grievous that “it intimates the employee’s abandonment of the intention to remain part of the employment relationship.” As a result, one must consider the particular facts of the alleged misconduct as well as the employee’s tenure and discipline history. A balance must be struck between the severity of the misconduct and the penalty that is imposed.

In this case, given the employee’s long and clean record and the extenuating circumstances surrounding his behavior and starting from the moment he was asked to leave the factory, the judge felt that termination was a disproportionate response to Mr. Czerniawski’s behaviour. Instead, the employer should have imposed some form of progressive discipline for the incident such as a disciplinary letter or a suspension in order to send the message that the behavior was unacceptable, including a warning that further behaviour of this nature could result in a dismissal. This is an important lesson for employers confronted with this type of situation. Where a long term employee, with a clean record, behaves unacceptably, it is critical that the employer ensure that the employee understands the nature of any disciplinary action being imposed, and that the employee is given every opportunity to tell his or her side of the story before a decision is made as to any penalty to be imposed. It is difficult to imagine how an employer can impose a penalty that is in proportion to the offence without first obtaining the employee’s side of the story and thereby obtaining a complete understanding of the events in issue. An employer who fails to take this step may end up making a costly mistake.