Thursday, December 15, 2011

Covelli v. Sears update

The inaugural post for this blog, back in March, dealt with a decision in Covelli v. Sears Canada Inc.  Find my full post here.

Put briefly, Mr. Covelli had pleaded that Sears had "adopted a corporate policy or practice of terminating employees for just cause, notwithstanding that it knows or ought to know that no just cause at law exists, as a means of unlawfully evading its statutory and common law obligation to provide employees with notice of termination, or compensation in lieu of notice."  Sears brought a motion to strike these portions of the pleadings, and was unsuccessful.

Today, the Divisional Court released its decision on Sears' motion for leave to appeal.  (For a motion in the middle of proceedings like that one, there is no appeal as of right - the party wanting to appeal has to make a motion to get the Court to agree to hear the appeal.)  The Divisional Court refused the motion for leave, and so Sears is pretty much out of options - the pleadings of systemic practices are in, and the plaintiff is entitled to production of all relevant documents.  According to Master Sproat's original decision on the motion, that means "fewer than 200 file reviews".

We're easily talking tens of thousands of dollars for Sears' counsel to look through 200 files and determine what needs to be disclosed.  But worse than that, if there is any merit whatsoever to the allegations of systemic practices, then disclosing the necessary documents would be lethal.  The plaintiff (actually, plaintiffs) are suddenly in a very good bargaining position.

That being said, it still seems half likely to me that there may be some more motions to be fought over productions, if Sears wants to play hardball.


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.

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