Employers be warned: punitive damages continue to climb

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Employers across Canada will have undoubtedly noticed the worrying trend of punitive damages not only rising but being handed out more regularly – a recent Ontario Superior Court case is a prime example of the very issue.

The case

In 2008, Alan Gordon sold his company to Altus Group – the transaction was valued at several million dollars but was open to adjustment depending on future performance.

At the time, both he and his wife Ann were hired by Altus but as the date for the price adjustment approached, Gordon expressed his belief that he was entitled to additional compensation in respect of the sale of business and the dispute was referred to arbitration under the terms of the sale.

However, at the same time, Altus began to allege various types of misconduct carried out by Gordon and he was eventually fired, along with his wife. Anne Gordon was paid notice in accordance with her contract and no litigation ensued.

The same, however, cannot be said for Alan Gordon, who was dismissed for cause and was awarded no notice as a result.

Altus outlined Gordon’s misconducted as the following:
  1. He was insubordinate and swore in the workplace;
  2. He was involved in a conflict of interest with respect to some aspect of his business dealings
  3. He had hired an employee whose non-work related fraud conviction was said to have jeopardized the company's interests.
All three were rejected.

(Continued...)

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