The case of Feldstein v. 364 Northern Development
Corporation, 2016 BCSC 108 from earlier this year is a
reminder to employers to be careful what they say to current and
Mr. Feldstein had recently been provided with working notice by
his current employer and was looking for a new job. Because Mr.
Feldstein suffered from cystic fibrosis, the health and welfare
benefits and, in particular, the long-term disability
("LTD") benefits, offered by any future employer were
critical to him.
Mr. Feldstein interviewed with 364 Northern Development
Corporation ("Northern") and asked several questions
about the benefits provided by Northern. With respect to LTD
benefits, he was advised that the benefits were available to
employees after 3 months of employment; he was not
advised that he had to fill out a health questionnaire or undergo a
medical examination to qualify for LTD.
Mr. Feldstein accepted employment with Northern and soon became
ill. When he applied for LTD, he was advised that he was only
entitled to the "Non-Evidence Maximum" of $1000 per month
because he had failed to fill out a health questionnaire when he
had initially enrolled in the benefits program. Mr. Feldstein had
expected to receive 66.67% of his monthly salary, approximately
$4,669, in monthly LTD benefits, not $1000. When he learned of the
discrepancy, he filed a claim against Northern for negligent
misrepresentation and sought damages for the lost LTD benefits.
At trial, the British Columbia Supreme Court (the
"Court") held that Mr. Feldstein had established a claim
for negligent misrepresentation. He was awarded damages in an
amount equal to the LTD benefits he would have received from his
prior employer (less the benefits he was currently receiving) for a
period of 40 months plus $10,000 in aggravated damages.
After reviewing the evidence, the Court found that, in light of
his health condition, it was clear that Mr. Feldstein would not
have accepted employment with an employer that did not provide
adequate disability benefits. It further found that: (i) Northern
owed a duty of care to Mr. Feldstein; (ii) it acted negligently
when it described the available benefits; (iii) it took no steps to
verify the accuracy of the information it provided; (iv) it should
have known that LTD benefits were an important part of his decision
making process; and (v) it was reasonable for him to rely on the
information that it provided.
The Lesson for Employers
An employer can avoid the mistakes made in this case by ensuring
that the benefits information it provides to employees and
prospective employees is accurate. A simple review of the benefits
contract or call to the benefits provider to confirm the LTD
eligibility requirements may have avoided the whole situation.
We understand that the decision of the Court in this case is
under appeal. We will keep you up-to-date on any developments.
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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