Dismissing high earners is high risk.

• Author: Bowal, Peter
• Position: Employment Law

Introduction

In the last employment law column, we profiled the dismissal-for-cause decision of Poliquin v. Devon Canada Corporation (2009 ABCA 216). In that case, the supervisor's firing was upheld by the Alberta Court of Appeal, on the basis that the employee had violated the workplace Code of Conduct regarding computer use and taking benefits from the employer's suppliers. The Court accepted these admitted facts to be transgressions for which firing was clearly an appropriate legal response.

Yet, the definition of cause for firing is rarely so clear. To illustrate that point, this column highlights another recent dismissal case, Merrill Lynch v. Soost (2009 ABQB 591) where arguably the grounds for firing were even stronger and more numerous--and the economic stakes frighteningly higher due to the authority and role of the employee--but the same Alberta courts at the same time found no sufficient legal cause to fire. The wrongful dismissal damages were considerable.

The Soost case is a powerful reminder for employers to have a plan in place to carefully manage dismissals. One can never rely upon a judge later agreeing on the seriousness of employee noncompliance with internal policies and procedures.

The High Earning Employee

It is not often that a high earning financial advisor's employment dismissal suit against his employer plays out in public. These straight commission earners effectively operate fast-paced mini-firms on high levels of client loyalty, yet within the institutional frameworks of national brokerage houses. With strong track records of financial performance and bulging books of client business, they have uncommon bargaining power to negotiate and optimize the terms of their employment. They can afford lawyers to protect their interests up front.

Soost

Kurt Soost rose from Vice-President at RBC Dominion Securities Inc. to Senior Vice President and Director of Merrill Lynch Canada in Calgary when the companies merged. In only seven years in the industry, Soost and his team served an enviable asset base of loyal clients, and he earned substantial commissions.

After seven years of combined experience at both merged companies, he was fired for what Merrill Lynch thought was sufficient legal cause on numerous instances of non-compliance with internal employer or industry rules. Soost's team was given a week off with pay, his clients were assigned to other financial advisors and letters were sent to them advising that Soost was...