Is the intentional destruction of company property cause for termination of employment without notice? Does it meet the higher burden of statutory “wilful misconduct”?
In Park v. Costco Wholesale Canada Ltd., 2023 ONSC 1013 (CanLII), a decision of the Ontario Superior Court of Justice sitting at Ottawa, the Honourable Madam Justice Robyn M. Ryan Bell held that summary dismissal was warranted.
Facts
The plaintiff in this case, Robert Park, worked for Costco Wholesale Canada Ltd for 20 years, before he was terminated without notice after he had twice deleted a website, he created for Costco’s use.
Beginning in late 2014, Mr. Park built a Google cloud-based website for the toys department. The website served as an online platform that allowed users within the department to easily share files with one another. Mr. Park developed and worked on the website during work hours, with the assistance of an inventory control specialist, who helped him with testing the site. Mr. Park described the website as his “pet project.”
There was no dispute that the website was Costco property.
For a variety of reasons discussed in the court’s decision, in the spring of 2015, Mr. Park was moved from the toy department to lawn and garden.
On April 13, at 5:09 p.m., the day Mr. Park began his new position in the lawn and garden department, Mr. Park’s direct manager, Mr. Breton, emailed Mr. Park as follows: “Hi Robert could you please grant us the access for the Google site you created for D28 Toys. At the same time, would you mind change [sic] the ownership to myself and Mark. thank you.”
On April 14, at 7:35 a.m. Mr. Park deleted the website. Mr. Park testified that he thought he deleted the website “right after” he saw Mr. Leblanc’s email. Mr. Park testified that he was “furious” and that it “was infuriating that they would pull this stunt.” He thought “they were asking for a revenge tactic or out of spite.”
Mr. Park then sent some more, questionable emails to company management.
At 11:04 a.m., on April 14, Costco was able to restore the website. Mr. Breton emailed Mr. Park at 1:33 p.m. to tell him that the website had been restored.
However, at 1:12 p.m., before Mr. Breton’s email was sent, Mr. Park deleted the website a second time, first from his computer, and then from the computer’s recycling bin. Mr. Park testified that he did not know the website had been restored. He saw the program on his computer and thought that maybe he had not deleted it properly.
Mr. Park agreed that both deletions of the website were deliberate. He also admitted to making a false and misleading statement in applying for employment insurance in stating that maybe his employer had “hacked his account.”
Mr. Park’s employment with Costco was governed by an employment agreement. Mr. Park was familiar with the Employee Agreement and, in particular, the standards of conduct by which managers were expected to abide. He acknowledged that it is important for management employees to follow the standards, and stated that they have “an extra onus” as leaders to set the proper example. Mr. Park also acknowledged that violations of the Employee Agreement could lead to discipline, up to and including termination.
Section 11.2 of Mr. Park’s employment contract was titled “Causes for Termination.” The section expressly states that “[t]he general course of action will be termination of employment.” The causes for termination include:
- 18. Wilful damage or destruction of Company property, equipment, merchandise or property of others on Company premises.
- 19. Any act of insubordination, including but not limited to: a. refusal to comply with the direct instructions or directions of a manager; b. contemptuous behaviour or remarks to a manager.
Positions and Arguments
Costco alleged that Mr. Park deleted the website on purpose and in defiance of the company’s explicit instructions. In addition to what it claimed to be Mr. Park's dishonesty and insubordinate behavior toward management, Costco charged that the double deletion of the website constituted wilful misconduct that called for Mr. Park's termination for just cause.
Mr. Park disputed that the removal of the website, either by itself or in conjunction with the other factors considered by Costco, justified the latter's decision to terminate Mr. Park's employment for cause.
Even though Mr. Park admitted that his decision to delete the website was “unquestionably poor judgment,” he claimed that it was a reflexive response to an email he received from his former supervisor, with whom Costco was aware that he had a "toxic relationship" and who was the main reason for Mr. Park's "significant mental health difficulties" at work.
According to Mr. Park, he was wrongfully dismissed from his job at Costco. He sought compensation for the loss of his extended health and pension benefits, as well as 24 months' pay in lieu of reasonable notice. In addition, he claimed aggravated damages, damages for bad faith, and violations of his human rights.
Decision of the Ontario Superior Court
In dismissing Mr. Park’s claim, Justice Ryan Bell considered not only the law concerning cause for summary dismissal, including the well-known decisions in McKinley v. BC Tel and Dowling v. Ontario (Workplace Safety and Insurance Board), Her Honour took the, in my view appropriate, next step of considering whether Mr. Park’s conduct met the test for disqualification to statutory entitlements.
Justice Ryan Bell’s reasons included the following analysis:
[84] The analytical framework established by the Supreme Court in McKinley requires that each case be examined on its own particular facts and circumstances, having regard to the nature and seriousness of the dishonesty or misconduct, to assess whether it is reconcilable with sustaining the employment relationship: McKinley, at para. 57. As the Supreme Court observed:
Such an approach mitigates the possibility that an employee will be unduly punished by the strict application of an unequivocal rule that equates all forms of dishonest behaviour with just cause for dismissal. At the same time, it would properly emphasize that dishonesty going to the core of the employment relationship carries the potential to warrant dismissal for just cause.
[85] The same point was made by the court in Partridge. In dealing with allegations of insolence and insubordination, the court observed that,
Again, context is significant; just cause will only be made out where the employee’s conduct is incompatible with the continuance of the employment relationship ... Examples are words or conduct that is prejudicial to the employer’s business, seriously undermines management’s authority, or destroys harmonious relations between the parties.
[86] In discussing wilful disobedience, the court in Hoang v. Mann, at para. 50, cited The Law of Summary Dismissal in Canada, at s. 16:200:
Wilful disobedience of an employer’s reasonable lawful order, on a matter of substance, strikes at the root of the employment contract, by breaching an essential implied condition of employment; accordingly, such acts or omissions constitute cause for summary dismissal. Even a single or isolated act of disobedience by an employee may justify dismissal, where the act or omission effectively repudiates the employment contract or one of its essential terms.
To constitute just cause, the employee’s disobedience must be a wilful, meaning deliberate and intentional, defiance of a clear and unequivocal order, instruction, policy or procedure of the employer. By wilful, it is meant that the employee’s defiance must be a deliberate act, based on a conscious decision.
[87] Contrary to Mr. Park’s submission, this was not a “single and isolated incident.” The established misconduct consists of four discrete and deliberate acts. Mr. Park’s first deletion of the website was deliberate, without authorization, and contrary to the Employee Agreement. His second deletion was deliberate, without authorization, contrary to the Employee Agreement, and contrary to Mr. Fleming’s instructions. Mr. Park’s email to Mr. Breton was misleading and violated Costco’s standards of ethics for managers: in sending the email, Mr. Park did not act with integrity and honesty. Mr. Park’s email to Mr. Fleming was insubordinate, disrespectful, and contemptuous.
[88] In Render v. ThyssenKrupp Elevator (Canada) Limited, the Court of Appeal addressed the distinction between “just cause” and “wilful misconduct” within the meaning of the regulation under the Employment Standards Act, 2000. At para. 79, the Court of Appeal cited with approval, from Wein J.’s decision in Plester v. Polyone Canada Inc.:
The test is higher that the test for “just cause”.
“In addition to providing that the misconduct is serious, the employer must demonstrate, and this is the aspect of the standard which distinguishes it from ‘just cause’, that the conduct complained of is ‘wilful’. Careless, thoughtless, heedless, or inadvertent conduct, no matter how serious, does not meet the standard. Rather, the employer must show that the misconduct was intentional or deliberate. The employer must show that the employee purposefully engaged in conduct that he or she knew to be serious misconduct. It is, to put it colloquially, being bad on purpose”. [emphasis in Render]
[89] Mr. Park’s misconduct in this case can only be described as intentional and deliberate. He admitted that he deleted the website intentionally, twice. He testified that he was angry that Costco had not shown enough interest in the website sooner, and that he felt Costco did not deserve to have the product of his hard work. He wanted to make sure the website was “gone for good” and explained that is why he took the steps he did to delete the website a second time.
[90] Mr. Park’s emails were written and sent intentionally. I find that, in sending the first email to Mr. Breton, Mr. Park intended to mislead Mr. Breton into believing that Mr. Park had deleted the website previously, and not in direct response to Mr. Breton’s email. In writing the second email to Mr. Fleming and others, Mr. Park purposefully engaged in insubordinate behaviour. Mr. Park’s conduct was in violation of the Employee Agreement. This was not conduct that was merely careless, thoughtless, or inadvertent. Mr. Park’s conduct was not trivial, and it was not condoned by Costco. Mr. Park was, colloquially, “being bad on purpose.” I find that his conduct amounted to wilful misconduct that meets the test for just cause for summary dismissal.
Commentary
The facts of this case made me laugh out loud. The deletion of the website, after Costco was able to restore it, just struck me as funny. Mr. Park knew what he was doing. He was given the chance to walk back his actions after Costco was able to restore the website, but he plowed ahead. As someone who has built on worked on a website platform for years, I know the amount of work that went into both creating the first website and in deleting it.
On the law, I am delighted that Justice Ryan Bell did the two-step analysis of considering whether Mr. Park’s conduct met the statutory requirements to disqualify him from receiving any form of notice or payment in lieu. The court’s approach in this case is absolutely correct at Ontario law. It is long overdue.
That said, I still don’t know whether we’re fully “there” yet in how the court is to approach summary terminations. Given that we all now acknowledge that “the test [for statutory disqualification] is higher that the test for “just cause,”” is reference to past decisions concerning “cause”, including those of McKinley v. BC Tel and Dowling still the appropriate starting point?
In my respectful submission the better approach, when an employer advances the position that it is entitled to summarily dismiss an employee is to start with the test for wilful misconduct. But, for the reasons set out in my post, Court of Appeal Recognizes that Employees Terminated “For Cause” May Still Be Entitled to Statutory Termination Benefits (April 23, 2022), I am still not convinced we have a properly articulated test for same. Perhaps we’re getting there.
If the employer cannot establish that the employee’s conduct meets the test for statutory disentitlement, then the court moves to the previously established test for “cause” to determine whether the employee’s entitlement should nonetheless be limited to no more than statutory entitlements.
If the answer to that question is “no,” then the court must perform the usual wrongful dismissal analysis.
Takeaways for Employers
The takeaway from this case for employers is that even with the Court of Appeal’s decision in Render now raising the bar on what it takes to summarily dismiss an employee, just cause is not a lost cause.
If you are an employer and you are contemplating terminating the employment of one of your employees, whether for cause or otherwise, why not make the investment in getting it right? We can assist in preparing the paperwork and otherwise advising on what may be required. If you enjoy my writing, why not try me in person?
Takeaways for Employees
The takeaway for employees is that even though the bar for summary dismissal is high, it still exists. Deliberate bad behaviour or “being bad on purpose” will continue to result in “being fired.” If you have been let go from your job and you’re concerned about whether what your employer has done is fair or appropriate, an investment in some experienced legal advice is likely prudent.
Contact Me
Come this far and want to speak with an experienced employment lawyer? Call me. Email me. Do what works for you.
I can be reached by email at sbawden@kellysantini.com or by phone at 613.238.6321 x233.
Sean P. Bawden is an Ottawa, Ontario employment lawyer and wrongful dismissal lawyer practicing with Kelly Santini LLP. For 2.5 years he was in-house legal counsel providing employment law advice to one of Canada’s largest corporations. He is also a part-time professor at Algonquin College teaching Employment Law for Paralegals. He has previously taught Trial Advocacy for Paralegals and Small Claims Court Practice.
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As always, everyone’s situation is different. The above is not intended to be legal advice for any particular situation. It is always prudent to seek professional legal advice before making any decisions with respect to your own case.
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