Court File and Parties

COURT FILE NO.: CV-15-529111 DATE: 20160831 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Rajnish Johar, Plaintiff AND: Best Buy Canada Ltd., Defendant

BEFORE: Justice Edward P. Belobaba

COUNSEL: Andrew Monkhouse and Samantha Lucifora for the Plaintiff / Moving Party Marc A. Rodrigue for the Defendant / Responding Party

HEARD: August 22, 2016

Summary Judgment - Wrongful Dismissal

1The plaintiff, Raj Johar, had been working as a repair technician in Best Buy’s Distribution Centre in Brampton for ten years when he was fired “for cause” on December 23, 2014. He now moves for summary judgment on his claim for wrongful dismissal. The defendant, Best Buy, says summary adjudication is not appropriate and, in any event, termination for cause was justified.

Background

2In December, 2014 the defendant discovered that the plaintiff had been accessing the company’s auction website during work hours. The internal website allows Best Buy employees to purchase returned or refurbished electronics at reduced prices.

3There is no suggestion that the plaintiff’s use of the website during work time was alone a ground for termination – the defendant’s investigator himself concluded that a written warning would have been more appropriate. However, the defendant also discovered that over the course of the year, the plaintiff had purchased a large volume of products on the website, including some 234 cell phones. Given the volume of purchases, the defendant suspected that the plaintiff was reselling the products for profit.

4After some further investigation, the defendant also found three ads placed by the plaintiff (in a community newspaper) that offered in-home electronic repair services. The defendant concluded that the plaintiff had posted these ads in 2014. There is little doubt that if the plaintiff had indeed been reselling products purchased on the employees’ website for profit and had been operating an in-home repair service in competition with the defendant, this would probably constitute a conflict of interest and cause for termination.

5The defendant proceeded to meet with the plaintiff on December 12 and 22. One of the two company representatives at each meeting made detailed notes of the questions and answers. At the December 12 meeting, the plaintiff was asked about the volume of purchases, especially the large number of cell phone purchases. The plaintiff’s answer was that he had “an extended family in India, so I buy.” At the December 22 meeting, when he was pressed again about the volume of purchases, his answer again was, “I have a big family. I felt like I could save.”

6When he was asked about the 2014 ads in the community newspaper, the plaintiff denied knowing anything about them and believed he was being “set up.” He offered to have the ads removed: “It’s not me. Someone is paying for that and I will pursue it.”

7The plaintiff insisted he did nothing wrong, told the defendant that he loved his job and that he would stop making purchases on the employees’ website. The defendant, however, was not satisfied with the explanations provided and concluded that the plaintiff must have been reselling the discounted purchases and must have been operating an in-home repair service in competition with Best Buy.

8The defendant also decided that the plaintiff had been dishonest during the two investigatory meetings. After a very brief third meeting on December 23, the plaintiff was terminated “for cause.”

9The termination letter set out two grounds for the dismissal:

(i) Conflict of interest: “Specifically, you put your personal interests ahead of Best Buy’s by soliciting business in direct competition with Best Buy. On April 12, 2014, Sept. 3, 2014 and Sept. 10, 2014 an ad appeared in the Weekly Voice newspaper that read:

Services provided - repair services provided – fast in-home repair services for all makes of projection tv, plasma, lcd, digital cameras, home theatres and other electronic equipment – do not delay call today raj at 416 [number].”

(ii) Dishonesty: “Best Buy has concluded that you failed to provide direct and truthful answers in the course of Best Buy’s investigation. This included failing to disclose that you were operating a competing business and claiming that the aforementioned advertisements were made without your knowledge or participation.”

10The letter concluded that “you have knowingly and intentionally violated our Conflict of Interest Policy and have breached the trust we placed in you as an employee. As a result, your employment is being terminated with cause effective immediately.”

The Applicable Law

11There is no dispute about the applicable law. Firing or terminating an employee for cause is the “capital punishment” of employment law. [1] The onus is on the employer to establish just cause for the dismissal. Not every incident or misconduct justifies termination for cause. Dismissal is warranted when the misconduct is sufficiently serious that it strikes at the heart of the employment relationship. [2] Whether or not termination for cause was justified requires a factual inquiry into the context and circumstances of the misconduct. [3]

Analysis

12I begin by noting that summary adjudication on the facts herein is wholly appropriate. Tracking the language in Hryniak v. Mauldin, 2014 SCC 7, [4] I am satisfied that summary adjudication is “a proportionate, more expeditious and less expensive means to achieve a just result.” [5] I am satisfied that I can make the necessary findings of fact, apply the law to the facts and achieve a fair and just adjudication of the case on the merits.

13The facts that pertain are set out in the two evidentiary affidavits filed by the parties. The plaintiff cross-examined on the defendant’s affidavit. The defendant, however, decided not to cross-examine the plaintiff on his affidavit.

14For the reasons that follow, the motion for summary judgment is granted. Neither of the two grounds justifying termination for cause - conflict of interest or dishonesty - has been established on the evidence before me. The defendant has not shown that the plaintiff was operating an in-home repair service in competition with the defendant or reselling purchased products for a profit. Nor has the defendant established the allegation of dishonesty. The plaintiff was wrongfully dismissed. He is entitled to damages in lieu of notice.

15I will discuss each of these points in turn.

(1) Conflict of interest justifying termination not established

16The conflict of interest referenced in the letter of termination related to the plaintiff placing ads in a community newspaper and operating an in-home repair service in competition with the defendant. The uncontroverted evidence, however, is that the ads in question were placed by the plaintiff in 2007, and no in-home repair service ever materialized.

17The defendant mistakenly assumed that the ads were current because the newspaper ran these ads as samples in its 2014 promotional effort to encourage the use of its classified advertising section. When the plaintiff ran the ads in 2007, the defendant’s repair work was limited to in-warranty repair. Therefore, the plaintiff would not have been competing with his employer. Further, the ads generated no business and no in-home repairs were ever done. In short, there was no competition with Best Buy, no conflict of interest - and certainly not enough to justify termination for cause. [6]

18The second conflict of interest accusation relates to the reselling of purchased products for a profit. The defendant acknowledges that there is no limit on the amount that can be purchased on the auction website – the only restriction is that the products purchased are not resold for a profit.

19I note that the “reselling for profit” allegation was not mentioned in the letter of termination. In any event, the defendant has adduced no evidence to support its belief that the plaintiff was reselling the purchased products for a profit. The defendant says that I should nonetheless draw this inference. But given the plaintiff’s evidence at the meetings in December that he was buying for his extended family in India, and his additional evidence in his affidavit that he suffers from a compulsive shopping disorder that requires prescription medication, I am not prepared to draw the inference suggested by the defendant.

20I find that the defendant has not shown on a balance of probabilities that the plaintiff was reselling the purchased products for a profit.

(2) Dishonesty justifying termination not established

21The defendant concluded that the plaintiff failed to provide direct and truthful answers during the investigation with respect to his operation of an in-home repair service and his reselling of products purchased on the employees’ website.

22I have reviewed the detailed notes from the two investigatory meetings of the questions asked and answers given and I am not persuaded that the plaintiff failed to provide direct or truthful answers. The plaintiff honestly had no idea about the 2014 ads and as it turned out he was right. The 2007 ads that he had placed at a time when an in-home repair service would not have competed with his employer came to nothing.

23As for the “reselling for a profit” allegation, the plaintiff denied doing this and his evidence remains uncontroverted. He did not disclose at these meetings that he had a compulsive shopping problem – that is true – but I attach little significance to this. Many people are reluctant to discuss personal medical problems, especially in an unexpected and stressful meeting with their employer.

24Whether the nature and degree of the employee’s dishonesty warrants dismissal is a question of fact. [7] I am not persuaded that the defendant has established a level or degree of dishonesty that justified termination for cause.

25The plaintiff was wrongfully dismissed.

(3) Reasonable notice period

26The case law on notice periods including the so-called “Bardal factors”, is well-known. [8] The plaintiff points to his ten years of employment, his status as a senior repair technician, his age (46 when he was terminated) and the recognized difficulty in getting another job when one is fired for cause, and he submits that a fair and reasonable notice period is 12 to 14 months. The defendant presents his own list of cases and argues that 6 to 8 months is more appropriate.

27In my view, the most reasonable range on the facts herein is probably 10 to 11 months. I agree with the plaintiff that two factors – his age [9] and the fact that he was dismissed for cause (with no letter of reference) – justify a notice period “at the outer end” of what is reasonable to “reflect the additional challenge of finding replacement employment.” [10] I therefore find that the plaintiff was entitled to 11 months notice.

28There is no mitigation issue. Since his dismissal, the plaintiff has made extensive efforts to secure new employment, applying unsuccessfully for more than 80 positions. He has recently become a licensed real estate agent but has earned no income to the date of his affidavit. I am therefore satisfied that the plaintiff has reasonably tried to mitigate his losses.

29Both sides agree that if damages are awarded in lieu of notice, the relevant components are: (i) base salary; (ii) average bonus; (iii) average overtime; and (iv) cost of benefits. The parties only disagree on overtime – the defendant says a five-year average should be used; the plaintiff urges a three-year average. Given that the amount of overtime was increasing significantly over the last three years, I agree with the plaintiff that a three-year average is more reasonable.

30The overall monthly entitlement can therefore be calculated as follows: salary $4617.60; bonus $68.91; overtime $232.55; and benefits $153.33, for a monthly total of $5072.39. Given my finding that an 11 month notice period would have been reasonable, the total damages payable to the plaintiff are $55,796.29.

Disposition

31The motion for summary judgment is granted.

32There will be judgment for the plaintiff in the amount of $55,796.29 plus costs.

33The parties agreed at the start of the hearing that a partial indemnity award of $35,000 would be fair and reasonable but have since asked for the opportunity to make further costs submissions. I will allow further submissions - the plaintiff should forward a brief written submission within ten days and the defendant within ten days thereafter.

34My thanks to counsel for the additional written submissions.

Belobaba J. Date: August 31, 2016

[1] Ball, Canadian Employment Law, (2016) at 11:10. [2] Dowling v. Workplace Safety and Insurance Board, 192 O.A.C. 126 at para. 49. [3] Ibid. Also see McKinley v BC Tel, 2001 SCC 38 at para. 57. [4] Hryniak v. Mauldin, 2014 SCC 7. [5] Ibid., at para. 49. Also see paras. 59 and 66. [6] Ball, supra, note 1, at 11:100: “A conflict of interest must be objectively clear and exist not merely in the perception of the employer.” Also see Segin v. Hewitt, [1993] O.J. No. 2868 at para. 13: “The degree of interference with the employer’s interests must be examined together with the nature of the employment.” [7] Carroll v. Emco Corporation, 2007 BCCA 186, at para. 15. [8] Bardal v. Globe & Mail Ltd., (1960), 24 D.L.R. (2d) 140 (H.C.J.) [9] Law v Canada (Minister of Employment and Immigration), (1999), 170 D.L.R. (4th) 1 (S.C.C.) at para. 101. [10] Lin v. Ontario Teachers’ Pension Plan, 2015 ONSC 3494, at para. 83; aff’d 2016 ONCA 619, at paras. 53-54.