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Costco justified in firing worker who deleted a company website not once, but twice

by HR Law Canada

Costco was justified in firing a long-serving employee who deleted a company website he created — not once, but twice — the Ontario Superior Court of Justice has ruled.

R.P. began working for Costco Wholesale Canada in 1995 as a front-end packer. Over the next two decades, he worked at multiple warehouse locations before being transferred, at his request, to head office in Ottawa.

When he was fired for cause on April 22, 2015, he held the position of assistant buyer with an annual salary of about $74,600. R.P. sued for wrongful dismissal, seeking 24 months’ pay in lieu of reasonable notice and for loss of extended health and dental.

He also sought damages for breach of his human rights and bad faith, along with aggravated damages.

Promotion and demotion

In February 2012, R.P. was promoted to the position of “buyer in training” in the seasonal and toys department. He remained in that position for about five months, and reported to Mr. Z, the assistant general merchandise manager.

In July 2012, he returned to his assistant buyer position, reporting to Mr. M., who was the buyer at the time. He said that, in moving back, he felt that Costco had “forced the demotion on me” and he felt “mistreated” and “abused.” Though he also said his desire to progress further was “negligible.”

In March 2014, Mr. B was promoted to acting buyer in toys and became R.P.’s direct manager.

R.P. did not like Mr. Z, or Mr. F. — who was Mr. Z’s boss. He felt Mr. F had given him negative feedback when it wasn’t warranted, and he resented both of them because he felt they were not receptive to his concerns when he did not become a buyer.

R.P. also had conflict with Mr. B, and claimed he made a racist comment about him — though Mr. B denied that claim. R.P. wasn’t looking for Mr. B to be fired, but wanted a transfer, which was refused.

When Mr. B was promoted to the position of permanent buyer, that set R.P. off. He refused a performance evaluation because of his conflicts with Mr. B. For his part, Mr. B knew R.P. was angry about his promotion but did not let that resentment hinder their working relationship.

A 2014 performance review by Mr. B acknowledged that park was passionate and knowledgeable. Costco also recognized R.P.’s frustration with past events, including the move back to assistant buyer. Mr. B’s advice was for R.P. to adopt a “can do and positive attitude” and noted that a more consistent positive outlook would help with teamwork and collaboration.

In short, he needed to “keep the passion but moderate the attitude.” In his testimony, R.P. noted that he would show his frustration, swear and raise his voice.

Medical leaves

R.P. took two medical leaves during his time at Costco — one from Jan. 23 to March 10, 2014; and a second from Feb. 3 to Feb. 23, 2015.

The first leave was the result of a “verbal confrontation” according to R.P., and he returned to work without issue.

During the second leave, he called his doctor to ask whether she could recommend a transfer to another department, and a transcript of his voicemail to the doctor was entered into evidence. But R.P. returned to Costco on Feb. 23 without any recommendations from his doctor. (Though a medical letter did arrive a few weeks later.)

Before returning on Feb. 23, Manulife — Costco’s benefits provider — recommended that a work facilitation meeting be held. When he returned, the company’s HR director was told by Manulife that R.P. might be interested in moving to another department. The HR director spoke to R.P. and said Costco would consider his request.

At trial, Costco testified that transfers are relatively rare. The HR director noted it only happens when there is an available position and someone would benefit from the experience in a different position. The employee agreement at Costco states an employee “must” request a transfer. R.P. did not follow the requisite process in requesting his transfer, it said.

The doctor’s letter

The letter from his doctor arrived on March 16, about three weeks after his return. It noted that R.P. “will need accommodation to reduce the stress in his workplace. Specifically, he may benefit from being transferred to another department.”

The HR director met with him the following day and noted R.P. was “definitely unhappy” in his current position as an assistant buyer in Toys, did not like the people he worked with and stated that if he remained where he was “things will not go well.” He also thought he had been blacklisted from being promoted.

Costco decided, in light of this, to move him to the lawn and garden department, effective April 13, 2015. R.P. was to be told of this decision on March 30, 2015. On March 18, the HR director told R.P. he would be transferred but that it could be a number of weeks before the move was finalized.

The transfer was announced March 30 with an effective date of April 13.

While R.P. alleged everything took too long to happen, the court found Costco acted in “good faith in arranging (R.P.’s) transfer to a different department and that there was no unreasonable delay.”

Website creation and deletion

In late 2014, R.P. built a Google-cloud based website for the toys department. It was an online platform that allowed users within the department to easily share files.

It was a “pet project” by him, completed during work hours, with the help of an inventory control specialist. There is no dispute the website was Costco property.

Mr. B thought the website was a good idea, and told R.P. it would be useful to the department and encouraged him to send it to management. R.P. did that and, on Jan. 19, 2015, sent an email with a link to the website to management.

Mr. F told Mr. B they would look into it, and Costco did not provide R.P. with any feedback on the website. It was during a busy period in buying, and then R.P. was on medical leave in February.

On April 10, 2015, Mr. F told Mr. B via email that he could no longer access the website. This is what followed thereafter:

  • On April 13, the day R.P. began his role in lawn and garden, Mr. B emailed him at 5:09 p.m. and asked for access to the site. He also asked for the ownership to change from R.P. to Mr. F and Mr. B.
  • On April 14, at 7:35 a.m., R.P. deleted the website. He was “furious” and thought it was “infuriating that they would pull this stunt.” He thought the ask was a revenge tactic or done out of spite.
  • R.P. emailed Mr. B to let him know the site had been deleted because nobody got back to him about it and he had the impression nobody was interested in it.
  • Mr. F emailed R.P. back and said he was “disappointed” and that he needs to ask his buyer before removing something from the system that other people have the ability to use.
  • R.P. responded with “Wow!” He said the site was for his own use, that nobody was interested and that management was ignoring him and not giving timely input on requests.

Costco was able to restore the website at 11:04 a.m. on April 14. Mr. B sent an email to R.P. that afternoon at 1:33 p.m. to let him know the website had been restored.

But at 1:12 p.m., before Mr. B’s email, R.P. deleted the website again. He said he did not know it had been restored and thought maybe he hadn’t deleted it properly.

He also admitted to making a false and misleading statement in applying for employment insurance in stating that maybe Costco had “hacked his account.”

The termination

Costco conducted an internal IT investigation into the site deletion. On April 16, it report to Mr. F that the site was first deleted by R.P. on April 14 at 4:35 a.m. PST. It was restored by another Costco employee at 8:04 a.m. PST. It was then permanently deleted by R.P. at 10:12 a.m. PST.

It decided to terminate R.P. for cause based on the website deletion.

The ruling

The court noted R.P. admitted that both deletions were deliberate acts. And it rejected his argument that the two events were really just a single “persisting” act to delete the website.

It noted that hours passed between the two actions and, following his termination, he did not admit to the second deletion. In fact, his statement of defence pleaded that he didn’t delete it the second time.

“I find that the deliberate deletion of the website amounted to damage or destruction of Costco property and was contrary to the terms of the Employee Agreement,” it said.

It also found that R.P.’s response to management was “insubordinate and disrespectful.”

“For example, (R.P.) demanded ‘exactly how many times should I be asking for an update, can I not trust in my managers to be able to get back to me in a timely manner and not ignore my requests?’ (R.P.) stated that his managers ‘need to take some ownership and responsibility.’ He suggested that the recipients ‘need to review with your managers how to manage their workloads…I shouldn’t have to babysit.'” the court said.

It also noted that R.P. acted dishonestly when he failed to notify anyone of his second, permanent deletion of the website.

R.P., 43 at the time of termination, was a managerial employee at Costco. The company expected such employees to act with integrity, honesty and forthrightness as required by the standards of ethics and that “anytime there is the slightest doubt about an activity that could be questioned regarding honesty, integrity or intent, you must discuss it with your Manager or Regional Vice President to remove any doubt.”

Costco’s investigation

R.P. argued the investigation was inadequate and flawed. The court noted the onus is on the employer to make its decision with regard to all the facts necessary for a full and fair understanding of what happened.

There is no obligation on employers to conduct a particular type of investigation before deciding to dismiss with cause, it said.

In this case, Costco determined Park deleted the website twice and confirmed the times of both deletions.

Summary termination was a “proportional response,” it said. The wrongful dismissal claim was dismissed.

Other damages

R.P. also sought damages for breach of the duty of good faith or breach of his human rights.

He said Costco deprived him of his statutory rights and common law entitlements to pay in lieu of notice. It also caused him “significant humiliation” made worse by the fact he had only recently recovered from an extended leave related to the manner of treatment in the workplace.

He argued that Costco failed to accommodate his mental suffering and disabilities, and it allowed Mr. B to communicate with him when it knew such communications would “provoke a negative reaction.”

The court said R.P. did not establish that Costco engaged in any bad faith conduct or unfair dealing in the course of his dismissal. It only told management what was happening, waited until it confirmed R.P. had deleted the website and the timings of those actions before deciding on dismissal.

The termination meeting happened in confidence, early in the morning.

The court ruled his mental health and his request for a transfer played no role in the termination.

Further, it said Costco acted professionally in its communications with R.P. and in respect of the termination itself. There was no evidence he suffered a visible and provable illness as a result of the company’s conduct.

“To the contrary, (R.P.) testified that he felt “refreshed” and “re-energized” following the termination of his employment,” it said.

The case was dismissed, with costs awarded to Costco.

For more information see Park v. Costco Wholesale Canada Ltd., 2023 ONSC 1013 (CanLII)

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