In a recent decision, the Ontario
Superior Court of Justice awarded a plaintiff 14 months of
reasonable notice pay despite the employee only having worked for
the company for less than 3 years.
As of 2009, the plaintiff, Bruce Rodgers, was the president of a
transportation company where he had been working 11 years. In
September of 2009, Rodgers was recruited by the defendant company,
CEVA Freight Canada (CEVA), to become Country Manager for its
Canadian Operations. CEVA's recruitment and interview process
included 7 interviews, two flights to Houston and an interview with
the Chief Executive Officer. Rodgers initially turned the job down
but CEVA upped the salary offer and included a signing bonus of
$40,000 in its second attempt to lure him away from his current
position. The offer also included a number of additional perks, as
well as an Equity Plan that Rodgers was required to partake in to
demonstrate his long-term commitment to CEVA. Rodgers accepted the
offer and borrowed $102,000 to make the necessary investment.
Slightly less than three years into his role with CEVA, Rodgers
was terminated without cause. At the time of termination, CEVA paid
Rodgers two weeks' salary in lieu of notice, minimal severance
pay and outstanding vacation pay. The termination provision in the
employment letter read:
"[y]our employment may also be terminated by our providing
you notice, pay in lieu of notice, or a combination of both, at our
option, based on your length of service and applicable legal
CEVA argued that Rodgers should be entitled to damages arising
from the termination of his employment, but such damages should be
tempered by the "length of service" as emphasized in the
The Court disagreed with CEVA's position and concluded that
the appropriate notice period was 14 months and awarded Rodgers
$345,985, inclusive of his pay received by way of mitigation.
The Court reasoned that while length of service is a
consideration in determining an employee's reasonable notice
period, it should not be given disproportionate weight. In
particular, the Court focussed on CEVA's inducement and
recruitment of Rodgers away from an otherwise secure position.
Another factor the Court considered was CEVA's Equity Plan
Rodgers needed to partake in. The Court held that the required
investment implicitly suggested that Rodgers was about to join CEVA
for the long haul. Other factors that contributed to a longer
notice period included his age, position in the company, ability to
find a similar position and CEVA's lack of assistance to
Rodgers as he pursued other opportunities after termination.
This case serves as a stark reminder to employers to recruit
with caution. Where job security is not explicitly promised,
certain acts leading up to the employee's hiring may be
construed as implicit promises of job security. Moreover, inducing
an attractive candidate to jump ship will factor into the
Court's analysis of an appropriate reasonable notice period.
Employing head-hunters (who are invariably found to be agents of
the employer) to recruit and lure a candidate may lead to a court
construing their efforts as an inducement, thus increasing the
reasonable notice period upon termination. The prudent approach for
employers is to properly draft termination provisions with a clear
and enforceable entitlement for a dismissal, without cause. An
additional protection for the employer could include language that
the employee knows the risks of leaving his or her current
employment, and did so on his or her own volition.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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