At-will workers refused the right to sue for fraudulent inducement

| Thursday, February 14th, 2008 | No Comments »

Canadian employees are not subject to at-will employment.  But their American counterparts are: Kenneth Smalley and four other plaintiffs were fired when their former employer The Dreyfus Corporation, terminated their employment without cause after the parent company Mellon Financial Corp. merged the taxable fixed income group with another fund group they owned, Standish Ayer & Woods.

The Plaintiffs contend they joined Dreyfus on the advice that the group would not be merged. Their claims of breach of contract and fraudulent inducement fell on deaf judicial ears. Chief Judge Kaye, relying  on the precedent established in Murphy v. American Home Prods. Corp., 58 NY2d 293, 305 (1983), found there was no grounds for the claim.

Relying on the Murphy decision, the Court ruled that, regarding at-will workers, "either the employer or the employee… may terminate the at-will employment for any reason, or for no reason". It further backed the previous decision adding "In the decades since Murphy, we have repeatedly refused to recognize exceptions to, or pathways around, these principles worked at-will or with no formal guarantee of employment".

Under Canadian law, at-will employment contracts are illegal.  At a minimum, employees are entitled to, at least, the amounts set out in the applicable provincial or federal legislation.  Any attempt to contract out of, or provide to the employee less than, the minimum standards would be considered void.   

For more information on employee’s need for proper contract review prior to signing, see my previous Metro News article; Contract Terms are Binding.

Daniel A. Lublin is a Toronto employment lawyer practising exclusively in the law of wrongful dismissal. He can be reached at dan@toronto-employmentlawyer.com or through his website, www.toronto-employmentlawyer.com.    

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