Courts will hold companies liable for misrepresentations made while hiring
Some employment relationships can begin like marital affairs. The employee is securely employed with another company when another organization comes along and induces her away to supposedly greener pastures.
Some employers will say or do anything to secure top talent. Consequently, an employer seeking to entice the employee away from her job may tend to embellish certain factors to reel her in. Some employers will be relentless in pursuit of an employee, despite the employee’s continued resistance.
A recent case from the Ontario Superior Court of Justice makes clear that an employer will be held liable for such aggressive actions if the employee leaves secure employment and is later let go without cause.
In Antidormi v. Blue Pumpkin Software Inc., Melissa Antidormi was securely employed at BEA Corporation, as its channel sales manager for Canada, before she was aggressively recruited to work for Blue Pumpkin.
Antidormi was very successful at BEA and won several awards. She was one of BEA’s highest achievers and earned a base salary of $108,000 and an additional $108,000 in commissions if she met her sales targets. She also had the opportunity to earn further commission based on accelerators, as well as stock options and a non-recoverable draw of $6,000. At the time Antidormi left BEA in 2002 she was on her way to earning about $300,000.
Over the course of 13 months, starting in 2001, Blue Pumpkin’s vice-president of sales Jeff Schmidt corresponded with Antidormi and forwarded her information about Blue Pumpkin. He reassured her about Blue Pumpkin’s financial stability and attempted to relieve any doubts or concerns she may have had in an attempt to attract her to Blue Pumpkin.
Of prime concern for Antidormi was financial stability and security, given that she was the main provider in her family. Schmidt told Antidormi that she, “would have a long and prosperous career with Blue Pumpkin” under the premise that she, “performed fairly consistent with any type of sales- or performance-oriented role.”
He told her that Blue Pumpkin’s commitment to Canada was unwavering and that the development of the Canadian market would take three to five years which was what Schmidt was recruiting her to do.
Antidormi eventually took Schmidt up on his offer, leaving BEA to work for Blue Pumpkin in July 2002. Schmidt left Blue Pumpkin in December of that year. When he left, Antidormi was reassured by executives of Blue Pumpkin that the company’s commitment to the Canadian marketplace was unwavering.
Despite this fact, Antidormi was terminated on Jan. 13, 2003, with two-weeks’ notice, an amount which was never provided to her. At the time of her termination she had exceeded her performance objectives. In fact Schmidt had testified that her territory and business plan was “more than what I wanted. It was an outstanding example of the quality of work that I expected from her.”
At trial the defendant gave no evidence to contradict either Antidormi’s or Schmidt’s testimony regarding the inducement and representations. Accordingly the trial judge found Blue Pumpkin had assured Antidormi that it intended to develop and was committed to developing the Canadian market over a three- to five-year period and that it wanted her to move to Blue Pumpkin to assist in that initiative. It assured her that as long as she performed well her position would be secure.
As a result of the inducement and misrepresentations, the trial judge found Antidormi was entitled to 10 months of reasonable notice. This was further extended by two months on account of Blue Pumpkin’s bad-faith conduct at the time of termination and throughout the litigation.
At the time of the termination of her employment, Blue Pumpkin failed to provide Antidormi with her entitlements under Ontario’s Employment Standards Act, 2000, as well as her commissions, which it had acknowledged were due and owing. The last commissions due to her were paid just prior to the trial despite her repeated requests for this money. Blue Pumpkin also failed to provide her with a record of employment until five months after the termination. It also failed to provide her with a T4 in a timely manner, thereby delaying the process of her request for a tax refund as a result of her unemployment. As a result the trial judge found Blue Pumpkin had acted in bad faith. Of the defendant, the judge stated:
“Its failure or refusal to address Antidormi’s concerns, to treat her fairly, reasonably and decently, taken together, amount to unduly insensitive conduct that has affected her emotionally and professionally and that ought to merit compensation.”
In total Antidormi was awarded 12 months of reasonable notice comprised of her salary, commissions and other benefits to which she was entitled. The court awarded her $320,000 plus the value of benefits during the notice period and costs she incurred in attempting to mitigate her damages.
This decision is currently being appealed by Blue Pumpkin.
Antidormi v. Blue Pumpkin underscores the need for employers to scrutinize their approach to recruiting employees. It makes clear that courts will hold employers to a higher standard of care and shows that what the employer says or does before the employee starts employment is meaningful. This is particularly so if the employer fails to treat the employee reasonably and decently when the employee is terminated.
Employers can take precautions by preparing clear written contracts which outline the expectations of both parties and solidify the provisions of termination. Employers can also take steps to educate those responsible for hiring new employees, particularly if they engage a headhunter or recruiter to act as an agent for the employers. Those responsible for the talent search must know and understand that their representations have consequences. They need to understand that they should not say or do anything that the company is not prepared to stand by, as the courts have made clear that employers that make representations to employees and lure staff away from bona fide secured positions will be held liable for damages.
For more information see:
•Antidormi v. Blue Pumpkin Software Inc., 2004 CarswellOnt 3831 (Ont. S.C.J.)
Natalie MacDonald is an associate with Grosman, Grosman & Gale, a Toronto-based law firm specializing in employment law. She can be reached at (416) 364-9599 or [email protected]. She acted as counsel for Melissa Antidormi in Antidormi v. Blue Pumpkin.
Some employers will say or do anything to secure top talent. Consequently, an employer seeking to entice the employee away from her job may tend to embellish certain factors to reel her in. Some employers will be relentless in pursuit of an employee, despite the employee’s continued resistance.
A recent case from the Ontario Superior Court of Justice makes clear that an employer will be held liable for such aggressive actions if the employee leaves secure employment and is later let go without cause.
In Antidormi v. Blue Pumpkin Software Inc., Melissa Antidormi was securely employed at BEA Corporation, as its channel sales manager for Canada, before she was aggressively recruited to work for Blue Pumpkin.
Antidormi was very successful at BEA and won several awards. She was one of BEA’s highest achievers and earned a base salary of $108,000 and an additional $108,000 in commissions if she met her sales targets. She also had the opportunity to earn further commission based on accelerators, as well as stock options and a non-recoverable draw of $6,000. At the time Antidormi left BEA in 2002 she was on her way to earning about $300,000.
Over the course of 13 months, starting in 2001, Blue Pumpkin’s vice-president of sales Jeff Schmidt corresponded with Antidormi and forwarded her information about Blue Pumpkin. He reassured her about Blue Pumpkin’s financial stability and attempted to relieve any doubts or concerns she may have had in an attempt to attract her to Blue Pumpkin.
Of prime concern for Antidormi was financial stability and security, given that she was the main provider in her family. Schmidt told Antidormi that she, “would have a long and prosperous career with Blue Pumpkin” under the premise that she, “performed fairly consistent with any type of sales- or performance-oriented role.”
He told her that Blue Pumpkin’s commitment to Canada was unwavering and that the development of the Canadian market would take three to five years which was what Schmidt was recruiting her to do.
Antidormi eventually took Schmidt up on his offer, leaving BEA to work for Blue Pumpkin in July 2002. Schmidt left Blue Pumpkin in December of that year. When he left, Antidormi was reassured by executives of Blue Pumpkin that the company’s commitment to the Canadian marketplace was unwavering.
Despite this fact, Antidormi was terminated on Jan. 13, 2003, with two-weeks’ notice, an amount which was never provided to her. At the time of her termination she had exceeded her performance objectives. In fact Schmidt had testified that her territory and business plan was “more than what I wanted. It was an outstanding example of the quality of work that I expected from her.”
At trial the defendant gave no evidence to contradict either Antidormi’s or Schmidt’s testimony regarding the inducement and representations. Accordingly the trial judge found Blue Pumpkin had assured Antidormi that it intended to develop and was committed to developing the Canadian market over a three- to five-year period and that it wanted her to move to Blue Pumpkin to assist in that initiative. It assured her that as long as she performed well her position would be secure.
As a result of the inducement and misrepresentations, the trial judge found Antidormi was entitled to 10 months of reasonable notice. This was further extended by two months on account of Blue Pumpkin’s bad-faith conduct at the time of termination and throughout the litigation.
At the time of the termination of her employment, Blue Pumpkin failed to provide Antidormi with her entitlements under Ontario’s Employment Standards Act, 2000, as well as her commissions, which it had acknowledged were due and owing. The last commissions due to her were paid just prior to the trial despite her repeated requests for this money. Blue Pumpkin also failed to provide her with a record of employment until five months after the termination. It also failed to provide her with a T4 in a timely manner, thereby delaying the process of her request for a tax refund as a result of her unemployment. As a result the trial judge found Blue Pumpkin had acted in bad faith. Of the defendant, the judge stated:
“Its failure or refusal to address Antidormi’s concerns, to treat her fairly, reasonably and decently, taken together, amount to unduly insensitive conduct that has affected her emotionally and professionally and that ought to merit compensation.”
In total Antidormi was awarded 12 months of reasonable notice comprised of her salary, commissions and other benefits to which she was entitled. The court awarded her $320,000 plus the value of benefits during the notice period and costs she incurred in attempting to mitigate her damages.
This decision is currently being appealed by Blue Pumpkin.
Antidormi v. Blue Pumpkin underscores the need for employers to scrutinize their approach to recruiting employees. It makes clear that courts will hold employers to a higher standard of care and shows that what the employer says or does before the employee starts employment is meaningful. This is particularly so if the employer fails to treat the employee reasonably and decently when the employee is terminated.
Employers can take precautions by preparing clear written contracts which outline the expectations of both parties and solidify the provisions of termination. Employers can also take steps to educate those responsible for hiring new employees, particularly if they engage a headhunter or recruiter to act as an agent for the employers. Those responsible for the talent search must know and understand that their representations have consequences. They need to understand that they should not say or do anything that the company is not prepared to stand by, as the courts have made clear that employers that make representations to employees and lure staff away from bona fide secured positions will be held liable for damages.
For more information see:
•Antidormi v. Blue Pumpkin Software Inc., 2004 CarswellOnt 3831 (Ont. S.C.J.)
Natalie MacDonald is an associate with Grosman, Grosman & Gale, a Toronto-based law firm specializing in employment law. She can be reached at (416) 364-9599 or [email protected]. She acted as counsel for Melissa Antidormi in Antidormi v. Blue Pumpkin.
