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Worker alleging inducement required to disclose financial records to prove he left higher-paying job

by HR Law Canada

A worker, alleging inducement in a wrongful dismissal case, has been ordered to disclose financial documents to prove his claim that he left a higher paying job.

The order from the Ontario Superior Court of Justice was made as part of a complicated legal dispute between the worker, WT, and technology firm HouseSigma Inc. and its subsidiary MadShare Inc. It requires WT to disclose specific financial documents dating from 2015 to 2018.

WT alleges that he was persuaded to join MadShare Inc. with certain promises, including a significant role in the company, only to later encounter a reduction in his promised pay. HouseSigma Inc., contesting these allegations, sought access to WT’s prior earnings, arguing that such documents could validate or refute his claims of inducement based on reduced compensation.

Upon review, the court determined that WT’s financial records — both personal and those from his corporation, TaaCam Inc. — were indeed relevant. Specifically, these earnings before his tenure at MadShare Inc. could shed light on his inducement claims and help discern if he genuinely faced a reduction in compensation upon joining the company.

“The plaintiff’s pre-employment income would also be some indication of what would constitute reasonable post-termination mitigation,” the court said.

While the employer had sought income tax returns from 2013-2018, and financial statements of TaaCam for the same period, the court narrowed that window to 2015-2018, calling it a “reasonable starting point.” It also noted that WT was seeking reasonable notice of at least five months in this case.

Simultaneously, the court ordered HouseSigma Inc. to produce financial documents from 2018 onward in relation to a separate but related oppression claim. WT also asserts that HouseSigma Inc. wrongfully transferred intellectual property, compensating with company shares whose valuation remains a key contention in the case.

There is more to this endorsement not covered in this article. See the link below for more details about this case, which also involves the transfer of intellectual property and the value of shares awarded.

HR Law Canada will continue to follow this story and provide updates if/when they become available.

For more information, see Tan v. MadShare Inc., 2023 ONSC 4538 (CanLII).

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