COURT FILE NO.: 71/22
DATE: 20221124
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Randy Clendenning, Plaintiff
AND:
Jacobs Engineering Group Inc, Defendant
BEFORE: The Honourable Justice J. A. Desotti
COUNSEL: Jonathan Pitblado Counsel, for the Plaintiff
Jeffrey E. Goodman Counsel, for the Defendant
HEARD: November 3, 2022
ENDORSEMENT
A. The Motion
[1] The motion before me is to strike paragraph 15 of the plaintiff’s statement of claim that states as follows:
- The defendant egregiously used the value of the aforesaid Employment Standards Act termination pay and severance pay as a bargaining chip by offering to pay them, and only them, i.e., no common law monies for wrongful dismissal, if the plaintiff would sign a full and final release, with the alternative being no payment of any kind. The plaintiff claims that this action is a breach of the implied term of good faith in the contract, and is abusive conduct warranting the imposition of punitive damages.
[2] There was a terminating letter and an offer to settle letter both dated October 1st, 2020 as follows:
Dear Randy,
This letter confirms our discussion regarding the Company’s decision to terminate your employment with Operations Management International Canada Inc. (the Company), for cause, as an outcome of the investigation September 16 to September 18, 2020, based on the conflict of interest with JT General Maintenance (JTGM) and the willful misconduct and neglect of duty of health and safety that is not trivial and attributed to the injury of an employee. The effective date of your termination is October 1, 2020.
Benefits
Your group benefits will end today, October 1, 2020. For additional information regarding the changes to your group benefits, please refer to the attached document. If after reviewing the information you have additional questions regarding your benefits, please contact EmployeeConnect at 1.877.586.4411.
Final Pay & Record of Employment
Your final pay will be deposited to your bank account on the next normally scheduled payroll following your termination date and your final pay statement will be mailed to your home address on file. This pay will include your remaining work hours through October 1, 2020, and any accumulated banked overtime and accumulated vacation hours less applicable deductions. Your ROE will be filed electronically with Service Canada within five (5) days of the end of the pay period in which your earnings have stopped.
Expense Sheets
You will be responsible for providing your Supervisor with any receipts for any outstanding eligible business expenses. If there is a balance on the credit/travel card relating to any personal expenses, you will be personally responsible for paying that balance.
Collection of Company Property
Your Supervisor or HR Consultant Kim Aspden will collect the following items, if applicable, on your last day of employment:
• Company Badge/Keys
• Client Site Badge
• Company owned cell phone
• Project Records/Technical Materials and Equipment/Tools
• Company Credit/Travel Card
• Purchasing Card
• Computer Equipment
• Health & Safety Equipment
• Intellectual Property Notebook
• Field Equipment
• Any other Jacobs tools and equipment
Confidentiality
The terms of the term set out above shall remain confidential and form an integral part of your agreement and you agree not to disclose any of the provisions contained herein except to your solicitors, your financial advisor, or as otherwise required by law. Please be advised that even after the termination of your employment, you are under a continuing obligation to keep to the strictest confidence any and all information you may have obtained about the confidential, proprietary and trade secret information of the Company and its parent, subsidiary, affiliated and related companies and organizations, and that of its clients and business affiliates. You must return to the Company all records and copies of records dealing with the operations and activities of the Company that are in your possession, and must return to the Company all confidential, proprietary and trade secret information of the Company and/or its clients and business affiliates that is in your possession.
Sincerely,
Operations Management International Canada Inc.
Rick Marsh
Area Manager
People and Places Solutions OMFS North & Canada
Dear Randy,
This letter is further to the letter of this same date terminating your employment for just cause and willful misconduct and neglect of duty. Without obligation to do so, given the serious nature of the conduct that led us to terminate your employment, and on a gratuitous basis due to your long service with the Company, Jacobs is prepared to provide you with your entitlements under the Employment Standards Act, 2000. This means you would receive a payment of 25 weeks (treating you as if you had a full 17 years service with Jacobs as of the date of termination). In addition, we would continue all your benefits for 8 weeks from today’s date.
In order to receive this payment you must sign this letter in the space set out below for your signature and the attached Release and return both documents to my attention. Please note that given we have no obligation to make this payment, it is important that you understand that this not intended to be the start of further negotiations. If you reject this offer, you will not receive any payment and Jacobs will vigorously defend its decision to termination your employment for just cause and under the Employment Standards Act, 2000.
Sincerely,
Operations Management International Canada Inc.
Rick Marsh
Area Manager
People and Places Solutions OMFS North & Canada
B. Analysis
[3] I have reviewed all the parties ‘Book of Authorities’, and I accept the statement of law with respect to motions to strike references to settlement offers in pleadings, as found in the decision of Peter Irwin v. Canadian Professional Sales Association before Master P. T. Sugunasiri as the factors as follows:
a) Does the impugned paragraph contain a reasonable claim to settlement privilege?
b) Is the settlement off relevant to the issues in the trial other than to use the offer to prove the weakness of the other party’s case?;
c) If the settlement offer is pleaded in support of allegations of bad faith, mental distress or punitive damages, do these allegations have an air of reality?
[4] The Master goes on to indicate that if the answers to the aforementioned questions are yes then the pleadings raise a triable issue and the impugned paragraph should generally remain, subject to the court’s residual discretion to consider the specific circumstances of the case and the overall interest of justice.
[5] What I accept was most significant from this decision was not that the offer was a bona fide offer to buy peace, but whether there is a triable issue on that point. If the offer contained a threat, then punitive damages may apply.
[6] In this case, the concern raised by the plaintiff is that in the ‘offer’ that the defendant made on the same day as the termination notice, constituted a “threat” as well and is thus shielded from the public interest in encouraging settlement.
[7] What counsel for the plaintiff perceives as most egregious is the indication in the offer that withholds the E.S.A. monies unless the plaintiff accepts the offer and signs a release.
[8] There is no issue that should counsel for the defendant establish “willful misconduct”, this would make the payment unnecessary, nevertheless, should this proof of “willful misconduct” be unsuccessful, then the employer may face a ‘bump up’ of the notice that was required under the E.S.A.
[9] In all, I am satisfied that there is a valid claim for punitive damages based on the content of the offer that reflects an ‘air of reality’ to this damage heading.
[10] Furthermore, since this motion is under the Simplified Rules and since the party who forwarded the two letters is a Rick Marsh the defendant’s area manager and not the affiant Kim Aspin, I see little merit in responding in kind to that affidavit.
[11] The conclusion that the failure of the plaintiff to file evidence or cross-examination the affiant leads to an ‘air of reality’ shortcoming is not born out by the contents of the affidavit nor the inability of the plaintiff to cross-examine (see Rule 76.04 (1))
[12] In the result, the motion to strike is dismissed. I can be approached through my trial coordinator on the issue of costs through a brief Zoom attendance within the next thirty days.
The Honourable Mr. Justice John A. Desotti
Date: November 24, 2022