In Benham v Suncor Energy Inc, 2026 ABKB 364 (Justice Dilts) the Alberta Court of King’s Bench upheld the termination for cause of a long-term employee, who was terminated shortly prior to his proposed retirement date.
Mr. Benham, a professional engineer with over 40 years of employment with Suncor and its predecessors, challenged the allegations of breaching confidentiality obligations and failing to recuse himself from an ongoing conflict of interest.
This decision restates the court’s approach to assessing with cause terminations and voluntary retirement.
Facts
The relevant facts as summarized by the Court:
- Benham (the “Employee”) had over 40 years of service with Suncor (and its predecessors)(the “Employer”), and at the time of his termination held the position of Senior Technical Advisor.
- In the years preceding his termination, the Employee also performed work for Suncor outside of his normal duties, as a consultant.
- The Employee had the approval of the Employer to perform consulting services, outside of his regular duties, pertaining to intellectual property and patented processes that were commercially valuable to the Employer and its investor (the “Project”).
- Project work files, including confidential and sensitive information were located at the Employee’s home, with the Employer’s express consent and knowledge.
- The Employee involved his son, at the time a recently graduated engineer, in the Project, without the knowledge or initial approval of the Employer.
- The Employee’s son had allegedly worked “hundreds of hours” on the Project, while also seeking to patent other comparable processes.
- When the Employee identified that his son was also working on the Project, the Employer’s legal team provided written notice to the Employee that he was contravening his obligations to the Employer and that the continued behaviour represented a violation of the Standards of Business Conduct and related policies. The legal team also identified remedial steps required.
- Some, but not all, of the remedial steps were completed by the Employee.
- A formal reprimand was provided to the Employee for:
- Maintaining business records at home;
- Continuing to disclose confidential information to his son; and
- Continuing to be in breach of the Employer’s Conflict of Interest and Confidentiality policies.
- The Employee’s son was working on similar technologies and applications, including filing his own patent, without disclosure to the Employer, notwithstanding that the Employee suggested that Suncor purchase his son’s patent.
- In addition to the warnings and reprimands provided to the Employee (including comments made on the Employee’s performance review), the Employer’s policies were clear and accessible, covering all confidential information and not merely intellectual property.
- The Employee willingly and knowingly continued to breach his confidentiality obligations by involving his son in the Project.
- The Employee submitted his retirement notice during the investigation of his ongoing conduct.
- The Employer’s investigation into conflicts of interest and non-compliance with confidentiality policies led to the termination of the Employee.
- As a result of the termination, the Employer cancelled the Employee’s unvested stock options and Restricted Share Unit (RSU) grants.
- The decision of the Employee to resign was voluntary, clear, and unequivocal.
Analysis / Conclusion
The Court noted that the onus for establishing just cause for termination rested with the Employer.
The Court applied the tests from McKinley v BC Tel, 2001 SCC 38 to determine if the magnitude and nature of an employee’s conduct justified a termination, as well as Baker v Weyerhaeuser Company Limited, 2022 ABCA 83 to assess the proportionality of the termination.
The Court considered the following factors in relation to the facts of this case: i) the employee’s length of service and role within the organization including their level of responsibility, ii) the employer’s reasonable expectations given the employee’s role and responsibilities and the employer’s policies, iii) any feedback, warnings or cautions given to the employee, iv) the employer’s business and how it was or could be impacted by the employee’s conduct, and v) whether the conduct was an isolated incident or a course of conduct.
The Court found the employer had just cause to terminate the employee in the circumstances of this case:
[88] Mr. Benham’s conduct does not reflect a single incident of an employee displaying poor judgment, corrected after it being brought to his attention. Mr. Benham’s actions show either a lack of understanding or a careless disregard of the obligations he owed to Suncor to protect its confidential information.
The Court went on to consider what the legal result would have been had there not been just cause for termination.
The Court applied Beggs v Westport Foods Ltd, 2011 BCCA 76 and determined that the Employee’s decision to resign in the face of an investigation was clear and unequivocal. The Court found that if there had not been just cause for dismissal, the resignation would have prevented a wrongful dismissal claim.
In finding that cause for termination was established, the Court found that the employee was not entitled to reasonable notice of dismissal (severance), and that his stock options and RSUs were properly cancelled.
My Take
The onus upon an employer to support a just cause termination requires a broad contextual approach supporting the conclusion that the employment relationship is unable to continue. In the context of a pending retirement, a notice period would only apply in the event of a without cause termination.
Where an employee receives repeated warnings and reprimands that their behaviour is violating employer policies, especially serious policies such as confidentiality and conflicts of interest, just cause will often be supported.
In this instance, the ongoing breaches of confidentiality provisions coupled with the active conflict of interest, in the face of warnings and reprimands, both from direct supervisors and the legal team, was sufficient to warrant a just cause termination that resulted in the cancellation of compensation in the form of RSU and stock options.
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