It's an interesting case for several reasons, not the least of which is that the fact pattern bears significant parallels to the Rob Ford MCIA saga (in which the Divisional Court will be releasing its decision in the morning).
The Facts
Ms. English started working at a truck stop in Cardinal in 1993; in 2001 she was transferred to a Woodstock service centre which was later purchased by TravelCentres. Over time, she rose through the ranks, and was promoted to General Manager in December 2006. She reported to head office in Ohio.
The service centre had some commercial tenants, including NAL insurance. NAL ran a "Truckers for Wishes" campaign in support of the Make-a-Wish Foundation, and English brought TravelCentres in on the campaign as well. She was excited about the goodwill it could generate for TravelCentres.
There were a few different prongs to the fundraising: Donation boxes, candle sales, a garage sale, and - finally - chicken wing sales at a truck show in summer 2007. English's supervisor, Matuszewski, wasn't thrilled with the participation in the truck show, but left it up to her to make the final decision.
Unfortunately, the chicken wing promotion became a nightmare. They ordered 140 cases of wings - over 50,000 chicken wings (and 550 lbs of carrot and celery sticks) - at a cost of over $12,000, and lacked the facilities and manpower to adequately handle the volume (in addition to their usual business). A communication breakdown with NAL resulted in nobody arranging transportation for the food to the truck show, and the time it took to find a transport to help cost them time. NAL had issues with health inspectors at its stand at the truck show, causing further delays. Ultimately, the sales at the truck show were "dismal": They only sold about 12% of the wings.
A number of issues arose from this - presumably, nobody had really contemplated such a catastrophic failure. NAL was to reimburse TravelCentres for the food sold at the truck show. They took this literally, and paid only $1500, for the wings which were sold. The rest of the wings were TravelCentres' problem. The supplier of the wings, GFS, had supposedly told English, when negotiating the deal, that they would take back and sell any leftover cooked product, but GFS ultimately disagreed with English's interpretation of that conversation. Bottom line: They paid for a huge amount of product that they hadn't moved. Many had to be thrown out, a few more cases were sold, but TravelCentres ended up burdened with a huge surplus.
This is where things got bad. On the findings of the trial judge, English concealed the extent of the wing catastrophe from her supervisor, and instructed her staff to keep him away from the surplus wings. In October, they finally added wings to the menu, but there were quality issues (and complaints from customers); some of the wings had been thawed, cooked, then re-frozen for months. English's staff rebelled, and went over her head to Matuszewski. It wasn't until December/January that he finally found out what had happened.
Furthermore, English paid GFS' full invoice, but to limit the amount of TravelCentres funds squandered on the fiasco, she raided the other funds which had been raised in the charity drive, from the donation boxes, etc. She got about $1500 there, another $1500 from NAL's contribution, and TravelCentres paid the rest of GFS' invoice.
On January 22, 2008, after finally finding out about the fiasco and coverup, and in particular about the payment of GFS' invoice out of funds meant for charity, TravelCentres asked for English's resignation, and she provided it. The next day, she rescinded her resignation.
The Ford Parallels
The Court concluded that TravelCentres had just cause to dismiss English. Interestingly, the first part of the analysis engaged by the Court is whether or not English's behaviour, in taking the funds meant for charity, was misconduct or simply an "error in judgment". (In a wrongful dismissal context, this is an odd question.)
It appears that English was arguing that her understanding was that the funds were all part of one pot, and therefore that using the proceeds of the garage sale, for example, to subsidize the losses on the chicken wing sale was not improper. The judge did not accept this: She had made representations that proceeds of the garage sale would go to charity, and ultimately directed them to another purpose. This was dishonest.
[96] There are facts favourable to Ms. English. Her seven year employment record with TravelCentres and 230 Truck Stop appears to have been otherwise unblemished. Her position as general manager was well-earned. The amount of money in issue - approximately $1,500, is, indeed, modest. Ms. English did not seek or receive any monetary benefit. She readily disclosed what had been done when asked by Mr. Matuszewski on January 21, 2008.
[97] On the other hand, Ms. English occupied the most senior position in Woodstock. She supervised more than 100 employees. Expectations were high and rightly so. TravelCentres had every right to expect and require that Ms. English consistently and without compromise act in good faith and honestly. [Emphasis added]What Did English Do Wrong?
As they say, it isn't the crime that gets you; it's the cover-up. The catastrophic result at the truck show, and the resulting loss, was a result of relatively minor and relatively understandable errors on English's part. She might have lost her job for it, but it wouldn't have been for cause. But it was her conduct after the truck show that sealed her fate.
English failed to correctly assess demand for wings at the truck show. This isn't entirely her fault; she was forced to estimate based on NAL's description of previous shows; NAL's personnel have no food industry experience.
English failed to confirm, in writing, her understanding that GFS would sell surplus wings. Likewise, she failed to confirm, in writing, her understanding that NAL would pay for all the food (and not just the food actually sold). But these aren't things that one would necessarily expect a 'rise through the ranks' manager to do - it takes more of a lawyer's paranoia to fully contemplate and prepare for the possibility of failure.
After the show, English failed to press GFS and/or NAL on the basis of her understanding of their respective arrangements. Especially with GFS, where GFS was demanding payment of TravelCentres, there was bargaining power to be applied in pursuit of a discount. Readily acceding and paying the full account, where there was material disagreement as to the terms of the contract, may not be appropriate for a general manager. But again, this is minor: It may have called for coaching, but not a for-cause termination.
It was only when she started hiding the facts from her supervisor, and in particular instructing her staff to participate in the cover-up, and failing in other duties to facilitate the cover-up (delaying putting wings on the menu, etc.), that she crossed the line into arguable 'just cause' territory.
My Thoughts
I can't disagree that there was just cause here; the consequences of her misconduct included 'fracturing' the workplace. She lost the trust of her employer; she lost the faith of her subordinates. She made the employment relationship untenable.
Though I do disagree with certain elements of the trial judge's analysis: It seems to me to be relatively thin to treat her as a 7-year employee, instead of a 15-year employee, for the purpose of mitigating factors (or for the reasonable notice period, which is obiter). It also seems to me to be a bit of a leap to the conclusion that her misappropriation of charity funds was actually dishonest: Her interpretation was probably wrong, for the reasons the trial judge illustrates, but given the various other misunderstandings English had with others, I wouldn't discount the possibility that it was a good faith error on her part. But, while the framing of the decision suggests that this is a critical factor, I don't think it is. It is the cover-up itself, and not the mis-allocation of funds, that undermined the trust necessary to continue her employment.
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This blog is not intended to and does not provide legal advice to any person in respect of any particular legal issue, and does not create a solicitor-client relationship with any readers, but rather provides general legal information. If you have a legal issue or possible legal issue, contact a lawyer.
"She made the employment relationship untenable."
ReplyDeleteEstablishing a strong relationship between employer and employees helps to create a safe and productive workplace environment. When this relationship is shaken up, it can create problems across the board. This is why clear communication between all parties is required to keep a workplace running safely and smoothly.