The recent case of Gordon v. Altus Group Limited
provides an interesting insight into one circumstance, at least, in
which punitive damages will be awarded against a former employer
which has acted egregiously.
Alan Gordon had a company which sold its assets to Altus in
November 2008. A portion of the purchase price was connected
to the performance of the business after the closing, with the
price to be adjusted if appropriate by February 2010. Gordon
was hired to continue working in the business, as an Altus
Gordon's employment contract with Altus provided for payout
provisions if the contract was terminated other than for cause, as
well as a non-competition clause.
As February 2010 approached, issues arose between Gordon and
Altus. Altus complained that Gordon was difficult to work
with, that he was involved in a conflict of interest, and that he
failed to inform Altus that one of the employees of the business
taken on by Altus had been charged with fraud. At the end of
March 2010, Altus fired Gordon, alleging cause and providing no
notice. Altus did insist, however, that Gordon honour his
non-competition obligation in his contract.
Although it is not clear from the judgment, it also appears that
before he was dismissed, the dispute between Gordon and Altus
relating to a possible adjustment in the purchase price for the
business had escalated to the point that Gordon commenced an
arbitration proceeding under the sale agreement to determine the
The matter went to trial in the summer of 2015. The trial
judge had no hesitation in finding that the allegations of cause
were simply examples of "Altus puffing up complaints to
justify its peremptory dismissal of Mr. Gordon". The
court concluded that if Altus did have complaints concerning Mr.
Gordon's behavior, it should have imposed progressive
The court went on to find that the real basis for the
termination had to do with the arbitration that Gordon had
commenced to determine the appropriate adjustment to the purchase
price for the business, if any. The court characterized this
conduct as "outrageous because Altus got mean and cheap in
trying to get rid of an employee as they approached
The court observed that according to the Supreme Court of
Canada, "punitive damages may be considered if there is an
independent actionable wrong" on the part of Altus. An
actionable wrong can be established with a breach of a distinct and
separate contractual provision or other duty such as a fiduciary
duty. In this case, the court found that Gordon's
termination as a result of his having given notice to pursue
arbitration under the purchase agreement constituted an independent
actionable wrong. The court awarded punitive damages at
$100,000 "because that sum of money notes the harsh treatment
to Allen Gordon over an extended period of time as a means of
sanctioning Altus for its terrible conduct".
Quite frankly, the decision is difficult to understand. It
is difficult to see how the invoking of the arbitration clause
would be anything more than simply the motivation for the
firing. One might easily consider such conduct worthy of an
award of punitive damages, but to call it an independent actionable
wrong does seem to be a bit of a stretch. Without doubt, the
court was particularly upset with what it found to be retaliatory
conduct on the part of the former employer. That would appear
to the be the only real issue setting this case apart from any
other case in which an employer alleges cause and fails to prove
it. As such, the case may well stand for the position that
wherever retaliatory conduct can be demonstrated, the door to a
possible award of punitive damages opens up.
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.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Unfortunately, reasonable accommodation for employees in the workplace continues to be the source of significant litigation and even today we continue to see outrageous examples of employers behaving badly.
We are now beginning to see reported cases involving charges and subsequent fines laid against employers for failing to provide information, instruction and supervision to protect a worker from workplace violence.
On October 13, 2016, the Supreme Court of Canada denied leave to appeal an Ontario Court of Appeal decision which ordered an employer to pay a former employee 37 months of salary and benefits following termination.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).