Corporate Self-Dealing Isn’t Just About Financial Gain

Author:Mr Howard A. Levitt
Profession:Levitt & Grosman LLP

This biblical command — "serve thy master not thyself" — might aptly reflect the law of the workplace, too. But there are times when an employee says "enough" and instead decides to serve his own interest over his employer's. Known as self-dealing, savvy employers have strict workplace policies prohibiting this.

The traditional notion of self-dealing includes behaviour such as:

Taking advantage of your employer's business opportunity; Using corporate funds as a personal loan; Purchasing company stock based on insider information, or A conflict of interest in any of its variegated varieties. All of the above include financial gain to the employee at the employer's expense. But what if the employee sees  no financial gain? Would this still constitute self-dealing and support termination for cause?

The Court has begun to recognize that self-dealing can manifest itself in ways that may not include financial gain.

What if the gain was to enhance his or her reputation and standing in the eyes of the employer?

Michel Poirier, a Wal-Mart employee since 1988, was to find out that this can constitute "self-dealing" and could support a just cause termination; even if the employee was acting in what he or she perceived to be the employer's best interest.

Poirier was appointed manager of a new Wal-Mart store in 2003, in part, because of his stellar record as a manager at its Guildford store in Surrey, B.C., which conducted about $60-million a year in sales. After his appointment, Wal-Mart conducted an investigation into his activities at the Guildford store and discovered he had engaged in payroll manipulation to keep his store within budget.

That included deleting associates' hours at the end of...

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