“Greatness
lies not in being strong, but in the right use of strength." – Henry Ward
Beecher

It’s workplace law’s newest, and biggest, phenomenon: lawyers specializing in
class action lawsuits, joining together groups of employees with similar legal
claims. But mass justice may come with a price: employees, excited by the
prospects of multi-million dollar settlements, unaware that their interests may
not be aligned.

Don’t misunderstand. If you are one of the thousands of Canadian employees with
claims for overtime, unpaid wages or pensions, joining a class action lawsuit
makes sense. Pursuing the matter on an individual basis is neither
cost-effective nor does it garner the same attention from your ex-employer as a
$600-million lawsuit on behalf of 10,000 employees would, such as the suit the
CIBC currently faces for unpaid overtime. With the potential of recovering
seven-figure damage awards and moving their case’s coverage from this column to
the front page of the news, the temptation to sue as a group is difficult to
resist.

However, with recent workplace class action lawsuits for overtime and unpaid
wages sharing national headlines with large scale downsizing and layoffs, class
action lawyers have been sharpening their pens, taking aim at mass wrongful
dismissal actions. But not so fast. In wrongful dismissal suits, where the
individual facts of each ex-employee’s claim determines its ultimate merit, a
class proceeding may be a mass mistake. Here are some of my concerns:

• Not all class action lawsuits actually proceed. Class action firms spend
great time and expense attempting to have the case certified by a judge. Some
linger uncertified for years. For overtime claims, such as the CIBC case, which
is still pending, most employees remain at their jobs or have found others. But
in wrongful dismissal cases where the plaintiffs are unemployed, there is a
need for speedy settlements or quick summary judgments.

• How will settlement monies in class action wrongful dismissal suits be
appropriately distributed? As the Supreme Court recently confirmed in the Keays
case, damages for wrongful dismissal should be adjusted upwards or downwards
based on the unique individual circumstances of each plaintiff, such as any
particular reason that would cause one person to take longer to find another
job. 

• Mass
lawsuits for wrongful dismissal may also create conflicting interests within
the members of the class. There will be instances where some ex-employees
should settle their claims, such as where re-employment is certain, while
others should hold out for a better deal. 

• How
will legal fees be equitably distributed? Class action lawsuits pay lawyers
based on a percentage of recovery. However, in a class action setting, the work
performed for each claimant is, in part, a duplication of the work performed
for the group. Further, if the lawyers are paid based on a percentage of
recovery for the group, what incentive do they then have to really consider the
unique circumstances facing each plaintiff?

In a mediation that I did last week, I represented five employees who are suing
their ex-employer for wrongful dismissal. It is not a class action suit, but I
have advanced their claims as a group, though each employee has a separate
claim. The mediator, one of the best known in Ontario, remarked that my clients were smarter to fight as a group rather than to stand
alone. “There is strength in numbers”, he argued while attempting to assure us
that the employer could not ignore five simultaneous claims.  He was
correct.

Although the case did not settle, we made our point.  If we could sue
individually but proceed as a group, what incentive do we have to join a class
action?

Daniel A. Lublin is an employment lawyer focusing on the law of dismissal. He
can be reached at dan@toronto-employmentlawyer.com.

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