In Park v. Costco Wholesale Canada Ltd., Justice Ryan Bell of the Ontario Superior Court of Justice decided a case involving the termination of a long-term employee for deleting a company website out of anger twice in a single day. Although the plaintiff advanced several arguments in an effort to lessen his culpability for the misconduct, the court ultimately found that the deletions themselves, along with the plaintiff’s conduct surrounding the deletions, were sufficient to justify summary dismissal in the circumstances.
The plaintiff was employed by Costco for 20 years. Initially, the Plaintiff had worked at several of the company’s warehouse locations, but he eventually requested and was granted a transfer to Costco’s head office in Ottawa. By 2011, he had worked his way up to the position of assistant buyer. At the time his employment was terminated without notice on April 22, 2015, he remained in that role, earning an annual salary of approximately $74,600.00.
During the course of his employment at head office, the Plaintiff experienced frustration and conflict with several colleagues, including his direct manager who, to the Plaintiff’s dismay, had been promoted into that position over him. The Plaintiff was also in conflict with the assistant merchandise manager and the general merchandise manager as the Plaintiff believed they had been critical of him and unreceptive to his concerns about missing out on the promotion. Despite this, the Plaintiff carried on in his role with the company, bound not only by the terms of his employment contract, but also by Costco’s “Standard of Ethics – Manager/Supervisors”.
In late 2014, the Plaintiff built a Google cloud-based website for Costco’s toys department. The website was essentially an online platform on which users within the department could easily share files with one another. There was no dispute that the website, which the Plaintiff built during working hours with the help of a co-worker, was Costco property. The Plaintiff’s manager, who saw the potential for the website to be useful to the department, encouraged him to share it with management. In January 2015, the Plaintiff did just that. Despite his efforts, he never received any feedback from management on the website.
On April 14, 2015, the general merchandise manager contacted the Plaintiff’s manager to advise that he could no longer access the website. The Plaintiff’s manager followed-up with the plaintiff by emailing him to request access. Upon receipt of the email, the Plaintiff deleted the website out of anger. He then replied to the email indicating that he had deleted the website because management had never gotten back to him about whether or not they wanted to use it. In an ongoing email exchange, the manager expressed his disappointment in the Plaintiff’s decision to delete the website. The Plaintiff replied to this by sending a disrespectful response to his own and other Costco managers.
Within a few hours, Costco was able to restore the website. However, later that same afternoon, the Plaintiff deleted it for a second time, first from his computer and then from its recycling bin. The Plaintiff’s evidence was that he did not know that the website had been restored by Costco, and that he had simply seen the program on his computer and thought that he might not have deleted it properly the first time.
Costco subsequently conducted an internal IT investigation in relation to the deletion of the website. At the conclusion of the investigation, the Plaintiff was dismissed for just cause for his actions in respect of the deletion of the website. Thereafter, the Plaintiff commenced an action against Costco seeking damages for wrongful dismissal, breach of the duty of good faith, human rights violations, and mental distress.
In the course of the litigation, Costco maintained that the Plaintiff’s actions were wilful and intentional, and in defiance of the clear directions of management. In Costco’s view, the double deletion of the website, along with other insubordinate and dishonest behaviour, amounted to wilful misconduct warranting dismissal for just cause. For his part, the Plaintiff denied that his deletion of the website, either on its own or in combination with other factors, provided just cause for the termination. While he acknowledged having exercised “unquestionably poor judgment”, the Plaintiff argued that his actions constituted a knee-jerk reaction to an email he received from his manager, someone with whom he asserted having a “toxic relationship” and who he alleged was the primary cause of his “significant mental health difficulties” in the workplace.
In her decision, Justice Ryan Bell was tasked with determining whether Costco did in fact have just cause to summarily dismiss the Plaintiff. She began by reviewing the standard established by the Supreme Court of Canada to be applied when assessing whether an employee’s dishonest conduct is sufficient to establish just cause for dismissal, noting that the core question for determination was whether the employee engaged in misconduct that was incompatible with the fundamental terms of the employment relationship. She then went on apply the standard to the facts of the case, a task that requires that the court determine the nature and extent of the misconduct, consider the surrounding circumstances, and decide whether dismissal was a proportional and warranted response.
Based on the evidence, Justice Ryan Bell held that both deletions were deliberate, discrete acts, separated by several hours, that amounted to the damage or destruction of Costco property. Amongst other things, the Plaintiff’s employment agreement provided that that acts of insubordination and wilful damage or destruction of company property, equipment, merchandise or property of others on company premises could justify termination for just cause. Accordingly, she found that the Plaintiff’s actions in respect of the deletions constituted misconduct contrary to the express terms of his employment agreement. Moreover, Justice Ryan Bell found that the Plaintiff’s attempt to retroactively characterize the second deletion as “merely an extension or continuation of the first” lacked credibility. In fact, she held that the second deletion, in addition to constituting an act of misconduct, was also an act of insubordination in light of the manager’s earlier communication seeking access to the website. Finally, in addition to the deletions, Justice Ryan Bell held that the Plaintiff’s email communications with several managers on April 14, 2015 – which were variously deemed misleading, insubordinate, inflammatory and disrespectful by the Court – constituted additional, discrete acts of misconduct.
After considering the surrounding circumstances, including but not limited to the Plaintiff’s years of service, his performance record and his responsibilities, Justice Ryan Bell dismissed the claim. She concluded that the Plaintiff had engaged in misconduct that was incompatible with the fundamental terms of his employment and that Costco was accordingly justified in terminating his employment for just cause. She stated:
… [The plaintiff’s] actions were not mere errors in judgment; they were intentional discrete acts involving the destruction or attempted destruction, insubordination, and sending a misleading email. These actions were committed in the face of his obligation to act with integrity and honesty in the discharge of his duties as an assistant buyer. The Employee Agreement provided that wilful destruction of property and insubordination could result in termination of employment. [The plaintiff] breached the Employment Agreement and thereby repudiated his employment contract by engaging in conduct incompatible with his obligations thereunder.
Notably, Justice Ryan Bell held that not only had the just cause standard been met by Costco at common law, but also that the plaintiff’s actions constituted wilful misconduct within the meaning of O. Reg. 288/01 (Termination and Severance of Employment) under the Employment Standards Act, 2000 (the “ESA”). As such, the plaintiff was not entitled to pay-in-lieu of reasonable notice at common law or the statutory minimum termination entitlements he would have otherwise received pursuant to the ESA.
In Our View
This decision provides an interesting example of the type of conduct from an employee that may, in the Court’s eyes, not only justify the termination of their employment for just cause at common law, but also rise to the higher level of misconduct required under the ESA to justify a termination without notice or severance.
For more information, please contact Sébastien Huard at 613-940-2744 and Kyle Shimon at 343-996-4932.