Court File and Parties
Court File No.: CV-19-628045 Motion Heard: 2021-02-24 Superior Court of Justice - Ontario
Re: Bruce Todd, Plaintiff And: Deloitte LLP, Defendant
Before: Master Jolley
Counsel: Ben Hahn, Counsel for the Moving Party Plaintiff Greg McGinnis, Counsel for the Responding Party Defendant
Heard: 24 February 2021
Reasons for Decision
[1] The plaintiff seeks the imposition of a discovery plan, with directions on the scope of documentary discovery. There is a wide gap between the scope of documents requested by the plaintiff and those that the defendant sees as relevant.
[2] The plaintiff has sued over bonuses he believes he was entitled to during his employment with the defendant. He alleges that it was agreed he would receive bonuses based on the gross revenue generated by U.S. tax services that he sold for Deloitte (statement of claim, paragraph 13). That claim was expanded in the plaintiff’s reply to “all new U.S. tax services generated by both Bruce and [his] as yet unbuilt-team” (reply, paragraph 5).
[3] He argues he was hired to build a team and that part of his remuneration was a “unique incentive compensation program” (as described by the defendant in its statement of defence). Given he would be spending time assembling and training the team, and not just direct selling himself, he argues that the term “net service revenue or NSR that is directly attributed to you” in his employment contract was understood to mean “revenue generated by the team he was building and attributed to him”.
[4] Deloitte relies on its written agreement with the plaintiff which details how any bonus is calculated. It denies that there was any agreement outside this written contract. It further argues that there is nothing to support the plaintiff’s interpretation of the plain language of the parties’ agreement. The plaintiff is trying to find a case by way of fishing expedition through an expanded search of the defendant’s documents.
[5] As its starting point, a discovery plan must take into account relevance, costs and the importance and complexity of the issues in the action (Rule 29.1.03(a)). The court must also consider the time, expense and any undue prejudice required to produce a document, whether requiring production would unduly interfere with the orderly progress of the action, whether the information is readily available and whether any order would result in an excessive volume of documents required to be produced (Rule 29.2.03).
[6] The defendant argues that, if the plaintiff’s position is accepted, it will be required to have someone review the time entries line by line for every member of the plaintiff’s team to sort out whether the entry relates to new work or to U.S. tax work. The amount of time and expense at this stage is disproportionate.
Chart heading: Information about Net Service Revenue (“NSR”) – 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11
[7] The defendant has produced information concerning engagements marked as “new work” where the plaintiff is listed as “opportunity lead” or part of the sales team. It has then cross-referenced those opportunities to its revenue tracking system to determine the NSR for sold engagements of new work generated by any sales team of which the plaintiff was part or was opportunity lead. Those records indicate that the plaintiff never exceeded the minimum bonus threshold in any fiscal year during his employment.
[8] The plaintiff wishes to expand those criteria so they are not limited to him or work that he was involved in but extend to work done by his team. He argues that the defendant must disclose all NSR associated with clients where the Opportunity Tracking System (“CRM”) database indicates that any of a named list of individuals who were on the plaintiff’s team was part of the opportunity team (chart item #7), all NSR associated with the U.S. tax service line or indirect tax service line where the mandate includes the word “state”, “état” or any state names or abbreviations (chart item #8) and data that includes all NSR associated with specific service offering codes related to U.S. tax work (chart item #9). He seeks to have these entries added as columns to the spreadsheet attached as Exhibit “A” to the affidavit of Saloni Vassa affirmed 13 January 2021 (the “Spreadsheet”).
[9] The defendant argues that any further additions would be overly broad. They would capture work that the plaintiff was not involved in and also capture recurring work. As a result, even if all the information requested was provided, it would not move the litigation along. What it would do is provide the plaintiff with all possible revenue, which he would then winnow to what he believes was generated by him or his team, something the defendant describes as the ultimate fishing expedition.
[10] I find the defendant’s approach too narrow as it assumes its definition of the scope of work to be included in the plaintiff’s revenue calculations for bonus purposes will prevail. Relevance is determined by all the pleadings, not just the statement of defence. If the plaintiff prevails in his argument that his bonus was to be based on all new U.S. work generated by his team, the court would have no documents from which it could assess damages.
[11] The defendant shall add to the Spreadsheet a column with the names set out in chart item #7 but limited to U.S. tax work, as defined by the codes in chart item #9 if that can be accomplished. Effectively the search will be of the parameters of items #7 and #9 together. The resulting productions should be sufficiently narrow that the work to review what is culled should not be onerous. There was no evidence before me to suggest that a search with these parameters would be either labour intensive or unduly costly.
[12] Production is not an admission of relevance, something the plaintiff will still be required to prove. While this may produce more than the defendant argues is relevant, it leaves both parties able to present their case.
[13] Chart items #8 and #10 are not necessary, at least at this stage, as items #7 and #9 will provide enough information on team generated U.S. tax revenue. Chart item #11 will not generate relevant information. It relates only to time entries which would not necessarily correlate to what is billed.
[14] The defendant has already provided chart item #1, which is a column with the WBS/mandates codes associated with each sold item included and item #4. It has also agreed to provide columns for chart items #3, #5 and #6.
[15] The plaintiff also requested disclosure of whom the defendant credited for generating the revenue (chart item #2). He has not established the relevance of this request. I do not agree that it is put in play on the basis of paragraph 23 of the defendant’s statement of defence that the plaintiff took credit for new work where his involvement was peripheral. He can refute that allegation without this disclosure. Further, whether he improperly claimed work is not dependent on who got credited for the work.
Chart heading: Correspondence – 1, 2, 3, 4, 6, 7, 8
[16] The plaintiff requested production of all correspondence he sent, received or was copied on during his seven years of employment relevant to any issue in this action (chart item #1). He argues this is relevant to his allegation that he and the defendant had a shared understanding about his role and compensation that was different other than what was reflected in their written agreement. This requested scope, unlimited by person, date or topic, is disproportionate and need not be produced.
[17] The plaintiff then sought all correspondence from a long list of employees, unlimited by time or topic that contains the word “Bruce” or “Bruce Todd” (chart item #2). This request is similarly overly broad and disproportionate.
[18] Chart item #3 requests all emails to or from the plaintiff and Jim McDonald containing a number of different terms, which I find are too broad. The defendant is to produce emails between the plaintiff and Jim McDonald but to ensure the scope of the search is manageable, it is to be limited to those emails that contain the term” bonus” or “incentive”. I find the term “compensation” to be too broad as well as the term “contract”, which will capture all or many customer or client contract discussions. Further, based on the pleadings outlining the key points of discussion, the timeframe is to be limited at this stage to January to June 2012 and September 2017 to the date of his departure. If additional timeframes become relevant during discoveries, they can be dealt with in that context.
[19] The defendant shall conduct a similar search in relation to emails with Dennis Metzler (chart item #4) and Aldrick Bueno (chart item #7) as the plaintiff has indicated that he had ongoing discussions with these individuals about his bonus entitlement. The defendant is not required to produce emails relating to Michel Lagrange (chart item #6) or Stacey Hunter (chart item #8) or the other individuals listed in item #2 as the description of their involvement is either not sufficiently specific or indicates that they were not directly involved in any discussion about the bonus issue but might only be involved in work for which the plaintiff wishes credit (for Michel Lagrange).
[20] It is agreed that the defendant will not delete any emails relating to any of the individuals listed by the plaintiff in his chart on this motion as having relevant information.
Chart heading: Other relevant documents – 1, 2, 3, 4, 5, 6, 7, 9, 10, 11, 12, 13, 14, 15, 18, 23, 26, 32 and 46
[21] Chart item #1 requests documents explaining the relationship between the defendant and other member firms of Deloitte Touche Tohmatsu Limited (UK). I am not persuaded that these documents are relevant to any pleaded issue. While his role may (or may not) be an issue in his bonus, the plaintiff has not established that documents this far afield are relevant and should be produced. For a similar reason the defendant need not produce documents from 2008 to 2012 relating to “its knowledge of the relationship between Mr. Todd and Deloitte U.S. and Mr. Todd’s compensation in that relationship” (chart item #18).
[22] The defendant need not produce draft versions of the plaintiff’s employment agreement (chart item #2). While the plaintiff argues these drafts may be relevant to the factual matrix and his negotiations, it is premature to require the defendant to produce these internal drafts. This is particularly so where the defendant has searched the plaintiff’s employment file and advised that no such drafts were located. Similarly documents showing the plaintiff’s proposals in respect of his incentive plan need not be produced at this stage (chart item #12). He is able to produce any drafts he has or question the defendant on drafts he may have sent during discoveries, if relevant.
[23] The defendant has agreed to make reasonable inquiries to look for documents such as business cases setting out why Deloitte was looking to hire Mr. Todd (chart item #3).
[24] I do not find that the documents listed in chart item #4 in this category need to be produced at this stage. The category is overly broad and undefined in that it seeks all documents relating to the plaintiff’s job responsibilities. There is no clear answer as to what documents would even fall in this category. For the same reasons, the defendant need not produce the documents showing the plaintiff’s mentorship efforts (chart item #5), his efforts to train others at Deloitte (chart item #6) or his mentorship expectations (chart item #7). Again, it is not even clear what kind of search parameters would yield these results. Further, the plaintiff does not allege in his pleadings that his mentorship was to be factored in as part of his bonus. His claim alleges that he was to receive bonuses based on the amount of gross revenue generated from U.S. tax services he sold for Deloitte. While his reply alleges that Deloitte wanted him to mentor and train others, it is in the context of having his group succeed and in support of his claim in his reply that he is entitled to a bonus based on the group revenue.
[25] Chart item #9 requests documentation showing the plaintiff’s compensation. There is no dispute on the pleadings as to what the plaintiff was paid. The documents need not be produced at this stage. The plaintiff has requested documents showing payments made in respect of his incentive plan (item #11). The defendant has advised there were no such documents as the plaintiff was never paid anything under the incentive plan. With respect to the one payment made in 2017, the defendant has agreed to search for any record that explains that $40,000 payment.
[26] With respect to chart item #10, the defendant advised it was likely that no calculation was done as the plaintiff’s numbers were so far off any entitlement. However, on the motion it agreed to provide any calculation that was done and to provide any financial calculations on which it based its decision that the plaintiff was not entitled to payment of a bonus.
[27] In response to chart item #13, the defendant has also provided financial disclosure to show engagement opportunities for new work in which the plaintiff participated either as sales lead or as part of a team and the NSR associated with those opportunities.
[28] The defendant’s response in answer to chart item #14 is sufficient. It is advised what qualifies as NSR and advised that “apart form the extensive data provided from CRM, there are unlikely to be any documents relating to this”. Entry into the system as “new” or “recurring” work is dependent on who codes the work. Its answer on the chart in relation to #15 is also sufficient.
[29] Chart item #23 requests documents showing any problems with the defendant’s revenue tracking approach. The defendant’s allegation that the plaintiff did not appropriately enter client engagements in the revenue tracking systems does not bring into play any systemic failure or problem with the revenue tracking approach. The defendant alleges that the plaintiff did not enter data into this system and it has agreed to produce any documents that show the inappropriateness of a lack of data entry. Otherwise, this request is overly broad and noting further need be produced.
[30] Chart item #26 requests documents showing any steps taken by either party in carrying out, amending, abandoning or disregarding the pre-approval process referenced in the plaintiff’s employment agreement. The defendant has conceded that the contract provision requiring Trevor Bell to pre-approve any services was never implemented and neither Mr. Bell nor anyone else was required to or did pre-approve the services. There were no other changes to the approval process. If there are documents that deal with amending or abandoning the process, the defendant has agreed to produce them.
[31] Chart item #32 requests documents showing the reason the defendant did not pay any incentive amount was because the plaintiff did not generate sufficient NSR. The defendant has agreed in answer to provide documentation in response to chart items #10 and #13 to sufficiently address this request. It has also now agreed to look to review the firm’s annual bonus assessment valuations and produce anything specific to the plaintiff.
[32] The plaintiff has requested drafts of his termination letter (item #46). The defendant has conceded that there could be relevant information in an internal draft that bears on the reason for the plaintiff’s termination and has agreed to produce any draft, subject to any claims for privilege.
[33] The parties have reached agreement on items 8, 16, 17, 19-22, 24, 25, 27-31, 34-45, 47 and 48 in this portion of the chart and I have not been asked to determine those issues.
Timetable
[34] The purpose of these determinations on production is to enable the parties to move this litigation forward. If additional documents become relevant during the course of discoveries, they can be dealt with by undertaking or further motion.
[35] The parties shall exchange affidavits of documents within 70 days of the date of this order and examinations for discovery will take place within 120 days of that exchange.
Costs
[36] Each party sought costs of the motion, with the plaintiff’s costs being roughly 50% more than that of the defendant, which was proportionate to the material filed and the plaintiff’s work on the chart.
[37] There was divided success on the motion and I order each party to bear his or its own costs. I am hopeful that, with this decision, the parties can expeditiously move forward to a determination of the case on the merits.
Master Jolley
Date: 24 March 2021