Court Dismisses Claim of 36 Year Employee Fired for Sharing Confidential Information
By Fasken - Written by: Matthew Larsen (Associate) & Harshi Mann (Articled Student)
“I shouldn’t be telling you this, but …” Court Rules Sharing Confidential Information with Subordinates is Just Cause for Termination of Manager
In a work environment that takes privacy and confidentiality seriously, a manager’s breach of confidentiality is a serious matter that may result in just cause for termination. This is particularly true when the manager is aware of the employer’s policy emphasizing the confidentiality obligations. The BC Supreme Court recently affirmed these principles in Manak v. Workers’ Compensation Board of British Columbia, 2018 BCSC 182, a decision which also highlights the significant value of a properly executed release.
Facts
Ms. Manak was terminated from her manager position at WorkSafeBC after 36 years of service. WorkSafeBC dismissed Ms. Manak for alleged breaches of their confidentiality standards. Ms. Manak was a Client Services Manager who also had responsibility for claims made by employees of WorkSafeBC – a highly sensitive position. Additionally, Ms. Manak was an ethics advisor, which meant she was a resource for employees for all matters relating to ethical conduct and WorkSafeBC’s Standards of Conduct.
Allegations were made by an employee that Ms. Manak was sharing confidential information with subordinates by:
- disclosing details surrounding the termination of two employees prior to their termination;
- discussing information regarding the claims of two employees of WorkSafeBC; and
- disclosing that a staff claimant had threatened to report the handling of his unresolved claim to Global TV when his claim was disallowed.
When asked about these allegations by her director and a human resources manager in a meeting, Ms. Manak denied all the allegations. WorkSafeBC suspended Ms. Manak while they conducted an investigation.
During the course of the investigation, the allegations against Ms. Manak were corroborated by another employee. While still suspended, Ms. Manak admitted to WorkSafeBC that she may have discussed the possibility of a claim being reported to Global TV in circumstances where the comments could be overheard by staff. She did not admit to the other allegations.
A few days later, Ms. Manak was called to the office and told that WorkSafeBC was terminating her for just cause and without severance. WorkSafeBC offered Ms. Manak the option to retire and receive a lump sum retirement benefit worth about four months’ salary in return for executing a release. She was given 24 hours to decide. Ms. Manak decided to execute the release, retire and take the package. Two months later, Ms. Manak commenced an action against WorkSafeBC alleging wrongful dismissal.
Decision
Ms. Manak argued that even if all the confidentiality breaches against her were proven, this conduct was not so serious as to constitute just cause for termination of employment. She argued, among other things, that she had no history of discipline and there was no proof of actual harm stemming from the disclosure.
The BC Supreme Court did not agree with Ms. Manak and found WorkSafeBC had just cause for termination. In coming to this decision, the court considered the important role of confidentiality in an organization such as WorkSafeBC. Specifically, Ms. Manak knew that a breach of the confidentiality standards could lead to termination, hence her use of the introductory phrase “I shouldn’t be telling you this, but…”
The breaches were serious considering Ms. Manak’s role as an ethics advisor and her responsibility for staff claims. The trust relationship between employer and manager here was simply too broken due to the pattern of inappropriate disclosures by Ms. Manak.
Ms. Manak argued that the release she signed should be set aside on the ground of unconscionability. The court found the release was not unconscionable for the following reasons:
- The settlement was not a grossly unfair and improvident transaction.
- Although Ms. Manak failed to obtain independent legal advice, she represented to WorkSafeBC that she had. Additionally, she had the opportunity to seek legal advice and did not take it.
- There was an imbalance in bargaining power but Ms. Manak was a manager, she was aware of the nature of the dismissal process, and she had time to consider the circumstances during her suspension.
- Although Ms. Manak was given only 24 hours to make her decision to sign the release, this did not rise to the level of being taken advantage of by WorkSafeBC.
Lessons for Employers
Just cause:Just cause for termination is a high standard, particularly for long service employees. It is rare that a single incident will amount to just cause for termination. This is, however, the second time in three years that a B.C. Court has found that the breach of a confidentiality policy was just cause for termination of a long service employee. Courts appear to be taking seriously an employee’s confidentiality obligations.
Execution of release: An employee should be provided time to consider their decision and to seek independent legal advice. Insist that an employee not sign on the spot without taking the offer home. The court in Manak found that 24 hours was a sufficient window of time. Where possible, we recommend providing a longer period of time, particularly where an employee is non-managerial and may be viewed by a court as vulnerable.