Chan v. Match Sports International, 2010 HRTO 459

HUMAN RIGHTS TRIBUNAL OF ONTARIO

B E T W E E N:

Daynia Chan

Applicant

-and-

Match Sports International Inc.

Respondent

DECISION

Adjudicator: Michelle Flaherty

Date: March 1, 2010

Citation: 2010 HRTO 459

Indexed as: Chan v. Match Sports International

Appearances

) Daynia Chan, Applicant ) Counsel, Ammy- Britton Cox ) ) Match Sports International ) Counsel, Ann E. Burke Inc., Respondent ) )

1This is an Application under section 34 of the Human Rights Code, R.S.O. 1990, c. H.19 as amended (the “Code”) in which the applicant alleges that she was discriminated against in employment on the basis of marital status.

OVERVIEW

2The applicant states that her relationship with her common law spouse (whom the respondent believed was associated with a competitor) was a factor in the respondent’s decision to lay her off. The timing of her dismissal is coincident with the respondent learning the identity of her common law spouse. The applicant also argues that the respondent unfairly and arbitrarily presumed, based on her marital status and the identity of her spouse, that she was disloyal and unsuited to the job.

3The respondent denies this and states that its decision was based, among other things, on its belief that the applicant had disclosed confidential business information. Neither the applicant’s marital status nor the identify of her spouse were a factor. Rather, the disclosure of confidential business information to any third party would have lead to the same result.

4The parties agreed that the only issue for me to determine is whether the respondent discriminated against the applicant by factoring her marital status into its decision to dismiss her.

5There are no significant factual issues in dispute. The parties filed a detailed statement of agreed facts and, as a result, it was not necessary for the Tribunal to hear any oral evidence.

6At the parties’ request, I bifurcated the proceedings to deal with the issue of liability at the outset. For the reasons that follow, I conclude that the respondent did not discriminate against the applicant contrary to the Code. Accordingly, it will not be necessary to deal with remedies.

THE FACTS

7In essence, the respondent’s business is to act a as an intermediary between clients who purchase sporting goods and companies in China which manufacture those goods. The respondent’s principal client is Kobe Sportswear Inc. (“Kobe”).

8From June 25, 2007 to December 19, 2008, the applicant was employed by the respondent as a senior merchandiser. Among other things, she liaised with Kobe to obtain product specifications and then sourced the requested products, managing orders placed with manufacturers. At all material times, the applicant was in a common law relationship with Drago Lo (“Lo”).

9The applicant made contact with a manufacturing company in China called Ming Chun and owned by Eric Leung (“Leung”). Although some issues later arose regarding the agreement, the respondent placed an order with Ming Chun for the manufacture of sports bags for Kobe. This was facilitated by the applicant in her function as senior merchandiser. It was anticipated that the respondent would receive the bags from Ming Chun, it would sell them to Kobe, and Kobe would then fill an order with its own client, Skis and Bikes.

10In the first week of December 2008, as a result of a downturn in business, the respondent decided to reduce its staff by four employees. It did not immediately identify which employees would be laid off.

11Around the same time, the respondent began to suspect that the applicant had disclosed confidential information (Kobe’s purchase order to the respondent) to Ming Chun. The respondent believed this was done with a view to cutting the respondent out of the deal.

12The respondent learned from Kobe that David Shand, a representative of one of the respondent’s competitors, had contacted Kobe’s client (Skis and Bikes) directly and offered to sell the sports bags for a significantly lower price than had been agreed to with Kobe.

13According to the agreed statement of facts, when asked how Ming Chun had obtained Kobe’s purchase order, David Shand replied that:

Leung was acquaintances with Drago Lo and Drago Lo was the Applicant’s boyfriend. Shand stated that he believed that the Applicant was the source of the order....

14Although the respondent knew the applicant had a common law spouse, it only became aware of the identity of her partner at this time.

15A representative of the respondent met with the applicant on December 18, 2009 to discuss the alleged information leak. She denied being the source of the leak. She also stated that, while Lo had assisted Leung (the owner of Ming Chun) with one job, he had not been paid for it and he did not, in fact, work for Leung. At the end of this meeting, the applicant was advised that her employment would be terminated. On December 19, 2009, she was told she had been selected for layoff.

16The respondent readily acknowledges that it cannot prove that the applicant disclosed confidential information. However, it argues that it reasonably suspected the applicant, not just because of the information provided by Mr. Strand, but based on other contextual factors, namely:

a. in April of 2008, Unity Sales Inc., a company with which the respondent had a “sourcing services” relationship, reported that the applicant had approached it about a business opportunity that did not involve the respondent. According to the respondent, this is in breach of the confidentiality agreement signed by the applicant, in which she agrees that she has no business relationship with any other party in similar product lines and that she will advise the respondent should any conflict appear imminent.

b. although the applicant disputes this, the respondent believed that the applicant found that Ming Chun was the only factory in China capable of preparing the bags. The respondent later learned that the applicant had never approached Unity Sales Inc. to see if it could fill the order.

17The parties agree that, in selecting the applicant for layoff, the respondent considered a number of factors including the drop in business; the fact that the applicant was paid more than a co-worker who performed similar functions; and the possibility that the applicant disclosed confidential business information to a third party.

ANALYSIS

18The relevant provisions of the Code are:

5(1) Every person has a right to equal treatment with respect to employment without discrimination because of race, ancestry, place of origin, colour, ethnic origin, citizenship, creed, sex, sexual orientation, age, record of offences, marital status, family status or disability.

10(1) “marital status” means the status of being married, single, widowed, divorced or separated and includes the status of living with a person in a conjugal relationship outside marriage;

19The parties are in agreement as to many of the relevant legal principles. They agree that the ground “marital status” includes and affords protection to the applicant’s common law spousal relationship. They agree, based on B. v. Ontario (Human Rights Commission), 2002 SCC 66, [2002] 3 S.C.R. 403, that the ground of marital status encompasses not only the status of being in a relationship, but differential treatment that flows from the particular identify of an applicant’s spouse. Finally, the parties agree that, to demonstrate discrimination, the applicant need only establish that her marital status was a factor in the decision to select her for layoff.

20Counsel for the applicant argued this case very ably. Her legal analysis rests on the Supreme Court of Canada’s decision in B. v. Ontario, supra, which affirmed a decision of the Ontario Court of Appeal.

21In B. v. Ontario, Mr. A’s employment with his brother-in-laws’ company was terminated when Mr. A’s daughter alleged that she had been sexually assaulted by one of the brothers-in-laws. The Court held that the termination was discriminatory on the basis of marital and family status. It occurred because of the sexual assault complaint, not because of any misconduct on the part of Mr. A or any demonstrated inability to continue performing his responsibilities. The Court found that this presumption of incompatibility was premature and arbitrary because it was based on the assumption that Mr. A could not be loyal to his employer or continue his work rather than any actual incompatibility.

22The applicant argues that this kind of presumption was also made in the case at bar. Because the applicant was in a relationship with Lo, someone the respondent believed to be associated with a competitor, she was presumed to have disclosed information. In support of this position, she makes two arguments. First, the layoff is suspect given its timing: the layoff is coincident with the respondent learning the identity of the applicant’s spouse. Second, the respondent had only indirect evidence of the leak and it did not take appropriate steps to investigate the allegations. She states that this demonstrates the arbitrariness and prematurity of the decision.

23The applicant analogizes the case to B. v. Ontario and argues that, but for her relationship with Lo, she would have been treated differently. In other words, she argues that it was her relationship with Lo that lead the respondent to conclude she had leaked information. The impermissible presumption, according to the applicant, is that the applicant is less trustworthy because of the identity of her common law spouse.

24I cannot accept this argument. In my view, this case is very different from B. v. Ontario, principally because the respondent had a basis to conclude that the applicant leaked confidential information.

25I want to stress that I am not deciding whether the applicant is the source of the leaked information. It is not necessary for me to do so. I also do not need to decide whether the respondent’s rationale for termination is correct, I need simply determine whether it was influenced by the prohibited ground of martial status.

26I accept that the respondent’s principal concern was the leak of information to a competitor. I accept also that the respondent was reacting to what it believed to be disloyal behaviour rather than to the identify of the applicant’s spouse. In other words, on the facts, I cannot conclude that the respondent presumed from the identity of the applicant’s spouse that she had disclosed or would disclose confidential information. The respondent’s conclusion was based on the information it received from Mr. Shand, the contextual factors described above, and the fact that Ming Chun appeared to have information it could only have received from someone internal to Kobe or the respondent. The only presumption involving Lo is that he may have been on the pathway the information travelled on its way to Ming Chun.

27The respondent readily acknowledged that it does not know whether the information was transmitted to Ming Chan through Lo. The respondent states that its layoff decision would have been the same whether or not it believed Lo to be involved in the transmission of information. I accept that, for the respondent, Lo’s alleged involvement was not material to its decision to layoff the applicant.

28I do not think the timing of the termination is of any assistance to the applicant. The respondent learned about the alleged leak at about the same time it learned of the identify of the applicant’s spouse. There is no reason to infer that the termination flowed from the new knowledge of the identity of the spouse rather than from the discovery of the leak.

29Finally, I do not agree that the termination was arbitrary or premature. In B. v. Ontario, the prematurity came from the respondent’s presumption that, in the future, Mr. A. would be conflicted and could not, among other things, remain loyal to the employer. The decision was arbitrary because it discounted Mr. A’s merits and capabilities and considered only presumptions that could be traced back to Code-related grounds.

30In this Application, the respondent had information that suggested the applicant had been disloyal and had disclosed confidential information. I am satisfied that its decision to layoff the applicant was not based on the presumption that she would disclose information but on its belief that she had already been the source of a leak.

31The Application is dismissed.