Home Featured Court calls employer’s defence ‘scorched earth and bare-knuckle’ in awarding $830,000 in costs in wrongful dismissal case

Court calls employer’s defence ‘scorched earth and bare-knuckle’ in awarding $830,000 in costs in wrongful dismissal case

by HR Law Canada

PearTree Securities has been ordered to pay over $830,000 in costs to DD, a former employee who had claimed wrongful dismissal, by the Ontario Superior Court of Justice.

Justice Robert Centa released a judgment that permitted DD’s claim and dismissed a counterclaim raised by PearTree Securities. PearTree had counterclaimed against DD, asserting that he breached restrictive covenants in his employment agreement by joining a rival firm nearly nine months after his termination.

PearTree claimed it suffered damages amounting to $1,599,000 and also sought $1 million in punitive damages.

However, the court determined that the non-competition and non-solicitation clauses in DD’s contract were “unenforceable,” being contrary to public policy and overly broad.

“There was also no evidence (DD) ever misused confidential information or competed unfairly,” Justice Centa noted.

DD had been recruited by PearTree in 2016 to serve as president and co-head of banking. He was abruptly terminated from his position in January 2018 without a stated cause. DD subsequently sued PearTree, asserting that the company owed him amounts between $3.194 million and $3.927 million, depending on certain calculations. PearTree conceded owing DD an amount in the range of $240,000 to $627,516.

In his judgment, Justice Centa found that DD had been “undercompensated” and was also awarded $10,000 in punitive damages for PearTree’s actions, which included suspending his salary continuation payments.

After the ruling, the parties worked together to calculate the amount owing to DD in light of its reasons — settling on $718,103.05, inclusive of prejudgment interest.

In addressing the costs of the proceeding, the court ordered PearTree to pay DD’s costs on a partial indemnity scale in the sum of $830,761.75, which includes disbursements and HST. The court’s reasoning emphasized that PearTree had “unnecessarily increased the costs of this proceeding,” with tactics like late document disclosures and a meritless counterclaim.

Justice Centa highlighted PearTree’s aggressive legal approach, stating the firm conducted the litigation in an “unforgiving, scorched earth, and bare-knuckle manner.”

He added, “PearTree’s decision to pursue a counterclaim and punitive damages of so little merit leaves me to infer that those claims were advanced only for tactical reasons.”

For more information, see Giacomodonato v. PearTree Securities Inc., 2023 ONSC 5628 (CanLII)

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