In Koshman v Controlex Corporation, 2023 ONSC 7045, an employer was particularly nasty in its termination of a long service employee. The Court exercised its considerable discretion in this wrongful dismissal action to award a 24 month notice period, aggravated damages, punitive damages and full-indemnity legal costs.
This case should serve as a reminder to employers that it is rarely in your interest to treat departing employees poorly.
Facts
The following were the facts summarized by the ONSC:
- The plaintiff employee, Martin Koshman, worked for the employer, Controlex Corporation, for 18.5 years in the position of Vice President
- Koshman was 69 years old
- For the later years of his employment, Mr. Koshman had a high degree of autonomy and was only required to report to the president, Peter Dent, on important matters
- Dent died, and the company came under the control of his wife, Susan Dent
- Dent was in charge for what turned out to be the remaining 8 weeks of Mr. Koshman’s employment
- Right after taking control, Ms. Dent immediately revoked Mr. Koshman’s signing authority, and began dealing directly with the employees reporting to Mr. Koshman
- Dent told clients of the defendant in this period that Mr. Koshman was “a nobody” and was “no good” and to deal with her directly. She also said she thought her husband may have been murdered and that Mr. Dent may have been involved
- 8 weeks after Ms. Dent took control, she terminated Mr. Koshman’s employment without an explanation or reason
- Koshman was unemployed for 3 years following termination of employment
- At some point in the first 2 years of unemployment, he earned $8,842 in several part time jobs that were not comparable to the one he lost with the defendant
- The defendant’s position in the litigation was that it had just cause for dismissal
- The defendant generally acted badly throughout the litigation process
Analysis / Conclusion
The Court had no difficulty finding there was no just cause for dismissal of the plaintiff, as there was basically no evidence of misconduct.
The Court assessed Mr. Koshman’s reasonable notice at 24 months, in part on the basis of the typical factors of age, years of service, and character of employment, but also in part on the basis that the defendant had made defamatory allegations against him which obstructed his ability to get re-employed.
Regarding the part-time income Mr. Koshman had earned after termination of employment, the Court declined to deduct it as mitigation income from the severance amount the defendant owed him:
[17] […] He earned $8,842 from several part time assignments which were not reasonably comparable to his senior management role with the defendant. In the circumstances this sum will not be set off against the damages for unpaid severance awarded in this judgement: see Brake v. PJ-M2R Restaurant Inc., 2017 ONCA 402, 135 O.R. (3d) 561.
The Court went on to find that Mr. Koshman was entitled to $50,000 in aggravated damages, noting as follows:
[22] It is apparent, for reasons perhaps only understood by the defendant’s new President Susan Dent, Mr. Koshman was to be terminated from the company and rather than taking appropriate steps to that end such as providing reasonable advance notice of her intentions or severance in lieu of notice, she set out to destroy his reputation. Later, in the course of this proceeding, she upgraded her attack on Mr. Koshman by advancing groundless allegations of breach of fiduciary duty, retained and then ended her relationship with four different law firms and ultimately abandoned the defence of this proceeding. The appropriate aggravated damages award in these circumstances is $50,000.
The Court went on to find that the defendant was also liable to pay Mr. Koshman $50,000, separately, for essentially the same reasons as were given for the aggravated damages award.
Finally, the Court awarded partial indemnity costs for a period of time in the litigation prior to a formal offer of settlement was rejected and a notice to admit facts was ignored, and full indemnity costs thereafter. The costs award totaled a whopping $192,112.19.
My Take
Judges have many different ways they can exercise their discretion in a trial decision. A great deal of that discretion is in the different types of damages and the amount of those damages.
When an employer is exceptionally nasty to a departing employee – like in this Koshman v Controlex case, the overall award against the employer can be staggering indeed.
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Bow River Law is a team of knowledgeable, skilled and experienced lawyers handling employment law, human rights (discrimination) and labour law matters. Bow River Law is based in Calgary but we are Alberta’s Workforce Lawyers.
