Justice George Strathy of the Ontario Superior Court has refused
to certify a proposed class action commenced against the Canadian
Imperial Bank of Commerce and CIBC World Markets on behalf of a
class of employees alleging that their jobs were misclassified in a
way that wrongfully defeated their entitlement to be paid
The decision, Brown v. Canadian Imperial Bank of
Commerce, follows two other relatively recent overtime cases
in the financial services sector – Fulawka v. Bank of
Nova Scotia and Fresco v. Canadian Imperial Bank of
Commerce. Certification was granted in Fulawaka but
denied in Fresco. Appeals in respect of both decisions,
which were off-the-clock overtime cases, are currently under
reserve by the Ontario Court of Appeal. Another recent
misclassification overtime case in the transportation sector,
McCracken v. Canadian National Railway, is also under
reserve at the Ontario Court of Appeal.
In Brown, the plaintiffs alleged a number of causes of
action, including breach of contract, unjust enrichment and
violations of the Employment Standards Act, 2000. On
behalf of the proposed class of analysts and investment advisors,
the representative plaintiffs sought $350 million in general
damages on the basis that employees of CIBC above certain
classification levels or with specific job descriptions were deemed
ineligible for overtime pay. This group specifically included
Analysts and Investment Advisors whom, among others, the plaintiffs
alleged had been misclassified.
Issuing his decision in the midst of this uncertain legal
landscape in Ontario, Justice Strathy reiterated the sentiment he
had earlier expressed in Fulawka, stating that
misclassification cases are appropriate for certification (and
perhaps more suitable than off-the-clock cases) as a result of the
commonality of employment functions involved and the existence of
common treatment by the employer.
Notwithstanding the comments about the general suitability of
misclassification cases for certification, Justice Strathy declined
to certify the action, finding that the question of whether an
individual had management responsibilities that "troubled the
court in Fresco and McCracken is an
insurmountable stumbling block in this case for
certification". Using a series of baseball analogies, Justice
Strathy attacked the plaintiffs' purported common issues as
being unworkable, broad, and lacking in commonality. Given the
evidence presented with respect to CIBC's complex job
classification system, Justice Strathy noted it was unclear how a
judge could ever make a fair determination as to whether a position
had managerial duties, the critical issue of fact required for a
determination of eligibility for overtime on a class-wide
Ultimately, Justice Strathy concluded that the proposed class
members had little in common except for their job titles. In order
to advance a misclassification overtime claim, plaintiffs must, at
a minimum, have a class with identical or similar job duties. The
decision notes that the plaintiffs, apparently alive to this issue,
had conceded in submissions that the determination of whether each
particular position had managerial responsibilities might have to
be made after the common issues trial.
Justice Strathy also rejected the proposed use of statistical
evidence to either circumvent the issue of commonality or to
provide a workable methodology to resolve key factual issues. In
doing so, he reiterated what he described as a well-established
principle of law in Ontario. Specifically, he noted that the
Class Proceedings Act cannot interfere with the
substantive rights of a defendant to have liability established
through evidence and not statistical probability. While statistical
evidence may be admissible and appropriate in many circumstances,
it could not be used to resolve a lack of commonality in the
context of overtime class actions.
The Impact of Brown
Although certification was denied on the facts of this case,
Justice Strathy's decision continues to leave the door open for
future misclassification cases. The viability of these and other
overtime class actions will be more clearly determined once the
Court of Appeal issues its reasons in Fulawka,
McCracken and Fresco.
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