Toronto Employment Lawyer

Don't be too quick to sign

This is the cautionary tale of two cases that reveal the fate of employees too quick to sign their names...

In Barr v. Pennzoil-Quaker State Canada Inc. the court ruled that the deal was less than what Barr could have received and was "unfortunate". However, it was not so bad that it was prepared to set it aside.

In Titus v. William F. Cooke Enterprises senior Ontario lawyer Douglas Titus was dismissed by William F. Cooke Enterprises and immediately agreed to its offer of severance. Titus read the termination documents at the meeting, including the release, which states in bold, capitalized letters: "I have read this document and I understand that it contains a full and final release of all claims ... I am signing this document voluntarily."  Titus signed his name and left with a cheque in his pocket.  Later on he sued, claiming the release was signed under duress and the deal he received was less than fair. But Titus, a lawyer for more than 20 years experience, with self-professed experience in employment law, couldn't convince the court that the deal he signed was so unfair it should be invalid.  According to the court, "with eyes wide open", he declined both opportunities, preferring to immediately accept the package instead.

These cases provide a stark message for employees when confronted with an offer of severance on an ironclad release: Fair or not, seldom will a signed document be set aside. Employees can avoid this result by observing the following advice:

Like any commodity, a termination package is usually negotiable. Seek specialized counsel before signing your name.

Duress, coercion or unconscionability are not easily proven - especially when the employee is given time to consider the offer. 

Ask for more time or the opportunity to meet with a lawyer if the terms of an offer or release are unclear.

Daniel A. Lublin is a Toronto Employment Lawyer specializing in the law of wrongful dismissal.  He can be reached at dan@toronto-employmentlawyer.com or visit www.toronto-employmentlawyer.com

Anything goes with job contracts

Canadian employers often protest that workplace laws favor their employees. My view is otherwise.

Most employees lack the necessary bargaining leverage or sophistication to renegotiate unfavorable contract language. Should confrontation ensue, a well-drafted employment contract creates an uphill battle for the employee.  That being said, not all written promises will be enforced.

Employees faced with an ironclad agreement may argue as follows:

If the employer applies duress or coercion, the agreement may be struck down.

In one case that I am handling, the employee claims that she was denied the opportunity to speak to her lawyer, despite requesting it, and was further told a demotion would be forthcoming if she did not sign her name. If the judge agrees that these pressures amount to a lack of consent, the agreement will be set aside.

Where an agreement forms such a departure from commercial morality, a court may intervene to ensure fairness.

In limited cases, a deal may be set aside where the party with stronger bargaining leverage preys on the weaker party, usually the employee, to create such an inequitable agreement that it would be substantially unfair to uphold. Beware: improvident deals between parties on unequal footing may be unfortunate, but unless the deal is offensive, it will be enforced.

If an agreement is illegal, it will be invalid.

Employers often attempt to oust their obligation to pay lengthy severance by drafting a contract that provides less severance that the minimum standards found in provincial legislation. In these cases the contract, or that portion, will be void.

Agreements must have proper "consideration" to be enforced.

Once a deal has been agreed to, it cannot be changed unless the employer offers extra value (a raise, bonuses, etc.) so the employee may decide whether to accept that deal. For example, Trusty Francis accepted an offer of employment from CIBC. On his first day he was presented with a number of forms and agreements that attempted to limit his entitlement to three months' salary if he was fired. The Ontario Court of Appeal found Francis' employment contract was consummated when he agreed to the first offer of employment and, because nothing of new value was given when he showed up at work, the agreements he was given to sign were unenforceable. Otherwise, the Court reasoned, an employer could unilaterally impose new terms of employment at any time and an employee would be without leverage to negotiate.

Contract language must be clear.

Where the language in the contract is not sufficiently clear, courts will construe the language in favor of the person who did not draft it. Customarily, the employee received the benefit of this rule.

Severability provisions may not always be effective.

Many employers insert severability provisions into contracts stating if a part of the contract is found void, the court should carve it out of the contract. These contracts risk being foiled in their entirety, as courts naturally refuse to rewrite the bargain that was previously made.

Daniel A. Lublin is a Toronto Employment Lawyer specializing in the law of wrongful dismissal.  He can be reached at dan@toronto-employmentlawyer.com or visit www.toronto-employmentlawyer.com

More on unpaid overtime class action suits - Law Times Article

Unpaid overtime. It is the issue at heart in two pending class action suits against major Canadian banks, CIBC and Scotiabank.

The Law Times recently published an article updating readers on the current situation regarding unpaid overtime and the major banks.  I was quoted in the article in respect of the advice I'm providing to employees and the fact that I've seen an increased interest in overtime disputes since the class action boom.  In essence, employees need to diligently document their evidence that they have worked overtime without compensation.  This can be documented in calandar enteries, emails, written notes, docket enteries, of even a compilation of sticky notes. 

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