Dacosta v. 2383914 Ontario Inc., 2014 HRTO 1047

HUMAN RIGHTS TRIBUNAL OF ONTARIO

B E T W E E N:

Hayley Dacosta

Applicant

-and-

2383914 Ontario Inc. o/a Crabby Joe's Tap & Grill and Shad Yearwood

Respondents

INTERIM DECISION

Adjudicator: Dawn J. Kershaw

Date: July 17, 2014

Citation: 2014 HRTO 1047

Indexed as: Dacosta v. 2383914 Ontario Inc.

WRITTEN SUBMISSIONS

Hayley Dacosta, Applicant

Frank Van Dyke, Counsel

2382914 Ontario Inc. o/a Crabby Joe’s Tap & Grill and Shad Yearwood, Respondents

Greg Dobney, Counsel

Obsidian Group Inc., Proposed Respondent

Bill Dimitropoulos, Counsel

Introduction

1This December 4, 2013 Application alleges discrimination with respect to employment because of sex contrary to the Human Rights Code, R.S.O. 1990, c. H.19, as amended (the “Code”).

2A mediation was held in this matter on May 5, 2014. A hearing is scheduled for November 19 and 20, 2014.

3The applicant filed a Request for an Order During Proceedings (“RFOP”) on May 9, 2014, requesting that Shad Yearwood be added as a personal respondent and that Obsidian Group (the “franchisor”) be added as an additional corporate respondent. The applicant did not deliver the RFOP on the proposed personal respondent and the proposed additional corporate respondent until June 9, 2014.

4The respondent numbered company (“the numbered company”), the proposed personal respondent and the franchisor each filed a response to the RFOP on May 23, 2014, June 30, 2014, and June 18, 2014, respectively.

The Law

5The analysis applied by the Tribunal when dealing with requests to add respondents is the analysis set out in Smyth v. Toronto Police Services Board, 2009 HRTO 1513 at para. 12 (“Smyth”). In Smyth, the Tribunal set out the following three considerations for deciding whether to add a respondent:

1. Are there allegations made that could support a finding that the proposed respondent violated the Code?

2. If the proposed respondent is an individual and an organization is also named, is there a compelling reason to include him or her as a respondent?

3. Would it be fair, in all the circumstances, to add the proposed respondent?

6When considering the second factor set out in Smyth, the Tribunal has applied the factors set out in Persaud v. Toronto District School Board, 2008 HRTO 31 at para. 5 (“Persaud”). These factors focus mainly on whether the corporate respondent is responsible for the conduct of the proposed personal respondent, and whether there is a compelling legal reason for an individual to be named as a personal respondent. In particular, there may be a compelling legal reason for an individual to be named as a personal respondent if his or her conduct is a central issue in the case and extends beyond implementing organizational policies or practices. A compelling legal reason may also exist where the nature of the alleged conduct may make it appropriate to award a remedy specifically against the proposed personal respondent if a Code infringement is found. See Sigrist and Carson v. London District Catholic School Board, 2008 HRTO 14 at para. 42 and Persaud at para. 5.

Parties’ Positions

7The applicant submits that the proposed personal respondent should be added as a party because the numbered company stated in its Response that it is not responsible for the actions of its employee because he was not working at the time of the alleged incident. As such, if that is found to be the case, and the proposed personal respondent is found to have infringed the Code, then it might well be appropriate to award a remedy specifically against the proposed personal respondent.

8The applicant further states that the franchisor should be added as a respondent because it is “responsible for the actions or inactions of the Franchisee and the actions of the [proposed personal respondent]”.

9The numbered company’s response sets out the applicant’s allegations with respect to the proposed personal respondent’s alleged actions on the night in question. It then points out that despite having mediated the matter with the numbered company, the applicant did not mention she intended to add the proposed personal respondent or the franchisor.

10The numbered company further submits that the applicant has provided no basis to find that the franchisor could have violated the Code and therefore the franchisor should not be added as a party. Although the numbered company also submitted it would not be fair to add the franchisor without notice to it, the applicant since has provided notice.

11With respect to the addition of the proposed personal respondent as a party, the numbered company submits that because the proposed personal respondent was not working on the night in question, there is no basis upon which the personal respondent could be found to have violated the Code. The numbered company further alleges that the proposed personal respondent should not be added as a party because the alleged acts were not committed by the employer or the agent of the employer or by another employee, they fall outside the protection of the Code. Finally the numbered company concedes that the first two factors as in Smyth are satisfied, but submits it would not be fair to add the proposed personal respondent at this stage of the proceedings. The numbered company further submitted that it would not be fair to add the proposed personal respondent when he had not been given notice, but the applicant since has given notice to him.

12The franchisor submits that the applicant has not identified any grounds upon which it could be found to have violated the Code. In addition, the numbered company is an independent contractor under the terms of the franchise agreement. The franchisor did not have an employee/employer relationship with the numbered company such that it could trigger s. 46.3(1) of the Code; it had no contractual or legal relationship with the proposed personal respondent; it had no control over the employment relationships into which the numbered company entered; and the applicant provided no evidence that the franchisor could be liable in these circumstances.

13The proposed personal respondent adopts the submissions of the numbered company, namely that he was not working on the night in question and therefore there is no jurisdiction to find that he violated the Code because he was not acting within the scope of his employment at the time; and that it would not be fair to add him at this stage of the proceedings.

analysis and decision

14I find that the applicant has provided no basis upon which to add the franchisor as a party. The applicant makes no specific allegations of discrimination as against the franchisor, but alleges only in a general sense that the franchisor would be responsible for acts of the franchisee [the numbered company]. Both the numbered company and the franchisor deny that the franchisor has any general vicarious liability for the franchisee and point out that their contractual relationship is such that the franchisor is an independent contractor and not liable for the acts of the franchisee.

15The allegations in this application are with respect to employment and it is clear that the franchisee is the employer. Given that the franchisor is a separate legal entity from the franchisee, and was never the applicant’s employer, there must either be something the applicant can point to that would either suggest the franchisor was vicariously liable from a contractual perspective or had itself committed an act that was arguably discriminatory. An example of the latter might be, for example, a national promotional event that all franchisees were contractually obligated to participate in by the franchisor and which the applicant alleged violated her rights under the Code for some reason. The applicant has failed to establish any basis on which the franchisor might be held liable with respect to any allegations she has made. For that reason, there is no basis for adding the franchisor as a party.

16The proposed personal respondent shall be added as a party for the following reasons.

17There is a factual and legal dispute to be resolved as to whether or not the proposed personal respondent was working on the night in question and whether the numbered company can be liable for his actions in the workplace as his employer if he was not working at the time of those alleged actions. I am not satisfied that there is no evidence upon which to base a claim for a violation of the Code by the numbered company in these circumstances at this stage.

18In addition, the proposed personal respondent could be found to have violated the Code as an employee of the numbered company even if he also is found to have been acting outside the scope of his employment.

19I agree with the numbered company that the request to add the proposed personal respondent comes somewhat late in the proceeding. However, the hearing in this matter is still more than four months away, which gives the parties ample time to prepare.

order

20The Tribunal orders as follows:

a. The applicant’s request to add Shad Yearwood as a respondent is granted and the style of cause amended accordingly.

b. The Registrar will deliver the Application, a Notice of Application, the Response filed by the respondent numbered company and this decision to the personal respondent.

c. The personal respondent is directed to file a Response to the Application with the Tribunal in accordance with the Rules within 35 days of the date of the Notice of Application.

d. The applicant may file a Reply to the personal respondent’s Response in accordance with the Rules.

e. The applicant’s request to add the franchisor as a respondent is denied.