Worker Classification To After-Acquired Cause: Key Employment Law Lessons From Salina v. Investors Group

In Salina v. Investors Group Financial Services Inc., 2026 BCSC 1168, the Supreme Court of British Columbia considered the termination of a long-serving investment advisor whose relationship with the defendant spanned almost three decades. The decision provides helpful guidance on worker classification, termination clauses, just cause, after-acquired cause, and the enforceability of post-contract obligations.

Background

The advisor worked with the defendant and its predecessor from 1991 until termination of the relationship in 2018. At the time the relationship ended, the advisor managed approximately $92.5 million in client assets and serviced roughly 500 clients.

On May 23, 2018, he attended what he believed would be a congratulatory breakfast meeting with a senior executive, only to be handed a termination letter.

The defendant terminated the advisor’s contract for cause, alleging that he was "unsupervisable." The advisor subsequently commenced a wrongful dismissal action, while the defendant advanced a counterclaim alleging breaches of his non-solicitation and confidentiality obligations following his departure.

The Advisor Was a Dependent Contractor

Although the parties' agreements characterized the relationship as an independent contracting arrangement, the Court found that the advisor was a dependent contractor, emphasizing the significant degree of control exercised by the defendant over the advisor's activities.

The Court also rejected the suggestion that the advisor had a proprietary interest in the book of business. The client relationships belonged to the defendant and remained with the defendant following termination of the relationship. Taken together, those factors supported a finding that the advisor was economically dependent on the defendant and entitled to reasonable notice absent just cause.

Termination Clause Unenforceable

The consulting agreement between the parties provided that the relationship could be terminated "with or without cause and with or without notice."

The defendant argued that this language displaced any entitlement to reasonable notice.

The Court disagreed, finding that a contractual right to terminate without notice was not equivalent to a clear contractual provision establishing an alternative notice entitlement. Because the provision did not clearly and unambiguously contract out of reasonable notice, it was unenforceable.

No Just Cause Based on Reasons Relied Upon at Termination

The defendant relied on several concerns to justify the termination, including the advisor's failure to promptly disclose that a client had named him as a beneficiary under her will, false attestations relating to that issue, concerns regarding certain mutual fund transactions, and his performance during a series of compliance reviews and action plans.

The Court accepted that the advisor had failed to make a timely disclosure regarding the bequest, provided a false attestation, and completed a commission-generating fund conversion involving an elderly client that raised legitimate conflict-of-interest concerns. However, the Court concluded that the misconduct known to the defendant at the time of termination did not justify terminating the relationship for cause, and did not render the advisor "unsupervisable."

Misconduct Discovered After Termination Established After-Acquired Cause

Following the advisor's dismissal, the defendant discovered 24 pre-signed forms from 13 clients, including transfer authorizations, RSP application forms, and pre-authorized contribution agreements.

The Court found that the collection and retention of pre-signed forms was prohibited by both the defendant's policies and applicable industry guidelines, that the advisor was aware of those requirements and that he had repeatedly certified his compliance with the rules governing pre-signed forms.

In those circumstances, the Court concluded that the newly discovered misconduct established after-acquired cause and provided a complete defence to the wrongful dismissal claim.

The Court added that, even if the pre-signed forms alone did not warrant termination for cause, they would have established cause when considered cumulatively with the advisor's failure to disclose the bequest and his related false attestation.

Counterclaim Dismissed

In addition to defending the wrongful dismissal claim, the defendant advanced a counterclaim alleging that the advisor breached his non-solicitation and confidentiality obligations following his departure.

The Court found that the advisor breached both obligations. He solicited former clients contrary to an enforceable non-solicitation covenant and retained confidential client information after termination of the relationship.

However, the defendant's counterclaim was ultimately dismissed because it failed to establish causation. Although a number of clients moved their business to the advisor's new firm, the Court was not satisfied that those transfers occurred because of the contractual breaches, rather than for other reasons, including the clients' loyalty to the advisor.

Key Takeaways

• Employment litigation often involves overlapping legal issues. Although this case involved a dependent contractor, the decision provides guidance on issues that frequently arise in employment disputes, including worker classification, termination clauses, just cause, after-acquired cause, restrictive covenants, confidentiality obligations, and causation.
• Winning individual issues does not guarantee success. The advisor successfully established dependent contractor status and defeated the defendant’s primary allegations of cause. However, his claim ultimately failed because misconduct discovered after termination established after-acquired cause and defeated his wrongful dismissal claim.
• Proving misconduct is only part of the analysis. While the defendant established breaches of the advisor’s post-contract obligations, it was unable to recover damages because it could not prove causation. Employers seeking remedies for employee or contractor misconduct must demonstrate not only that a breach occurred, but also the losses that resulted from it.

To view the original article click here

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.