This biblical command — "serve thy master not thyself" — might aptly reflect the law of the workplace, too. But there are times when an employee says "enough" and instead decides to serve his own interest over his employer's. Known as self-dealing, savvy employers have strict workplace policies prohibiting this.
The traditional notion of self-dealing includes behaviour such as:
- Taking advantage of your employer's business opportunity;
- Using corporate funds as a personal loan;
- Purchasing company stock based on insider information, or
- A conflict of interest in any of its variegated varieties.
All of the above include financial gain to the employee at the employer's expense. But what if the employee sees no financial gain? Would this still constitute self-dealing and support termination for cause?
The Court has begun to recognize that self-dealing can manifest itself in ways that may not include financial gain.
What if the gain was to enhance his or her reputation and standing in the eyes of the employer?
Michel Poirier, a Wal-Mart employee since 1988, was to find out that this can constitute "self-dealing" and could support a just cause termination; even if the employee was acting in what he or she perceived to be the employer's best interest.
Poirier was appointed manager of a new Wal-Mart store in 2003, in part, because of his stellar record as a manager at its Guildford store in Surrey, B.C., which conducted about $60-million a year in sales. After his appointment, Wal-Mart conducted an investigation into his activities at the Guildford store and discovered he had engaged in payroll manipulation to keep his store within budget.
That included deleting associates' hours at the end of the week and then paying them out of the cash office and instructing the back-up personnel manager "to enter associates' worked hours as sick time to keep your payroll within budget." In short, he made his store's performance look better to management but doing so never cost Wal-Mart additional money.
At the conclusion of the investigation, Poirier was fired for cause and he sued.
In upholding Wal-Mart's decision to terminate employment, the court accepted that Poirier did not gain financially from his manipulations. However, it did find that he engaged in this behaviour to enhance his own reputation and standing in the company — there was something to gain, although it wasn't monetary.
Placing his own interests ahead of his employers, was enough to substantiate his just cause termination for self-dealing.
Instead of applying a rigid application of just cause based on the age-old categories, courts are now upholding terminations for conduct that historically would have been rejected; including when there is no financial gain. Breach of trust is not taken lightly.
This article originally appeared in the Financial Post.
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