Home Constructive Dismissal Former VP at Callidus Capital retired and was not constructively dismissed, court rules, in awarding $1.8 million for vacation, bonuses, stock options

Former VP at Callidus Capital retired and was not constructively dismissed, court rules, in awarding $1.8 million for vacation, bonuses, stock options

by HR Law Canada

A former vice-president at Callidus Capital retired and was not constructively dismissed, the Ontario Superior Court of Justice has ruled. But it still awarded him more than $1.8 million for unused vacation, unpaid and deferred bonuses, and stock options.

The vice-president, CB, was partially granted a motion for summary judgment against his former employer. The case centered on his claims regarding employment termination and compensation disputes following a series of events that led to his early retirement in 2016.

CB, who joined Callidus in July 2009, was in charge of underwriting and portfolio management. His departure from the company on Sept. 6, 2016, was precipitated by a combination of deteriorating health and a workplace environment he described as “increasingly toxic.” Allegations of a poisoned work environment, including physical and verbal abuse from senior management, were central to his argument for constructive dismissal.

Oral contract

The court examined several key elements of CB’s employment and subsequent departure. Notably, his employment contract was oral, a fact that played a significant role in the court’s deliberations. The evidence presented included CB’s assertion of being subject to “unrelenting criticism and verbal abuse” and a physical altercation involving senior management, which he witnessed.

Justice Morgan, in his ruling, noted, “(CB’s) evidence does not support a finding that the effective transfer of responsibility for accounts… was a breach of his employment contract, let alone a substantial breach.” This statement highlighted the complex nature of determining constructive dismissal, especially given the nuances of CB’s case.

Vacation pay

His claim for accumulated vacation pay was a significant aspect of the case. The court found that CB was entitled to compensation for 22 weeks of unused vacation, based on an annual salary of $220,000.

In this context, Justice Morgan said, “(CB’s) evidence is that he worked exceptionally hard for the benefit of Callidus during his employment, and did not take vacation time to which he was entitled because of his dedicated service to Callidus.”

Deferred bonuses, stock options

Another crucial part of the dispute involved deferred bonuses and stock options. CB contended that Callidus failed to honor its obligations regarding these compensation elements.

The court awarded him $525,000 in damages for unpaid and deferred bonus amounts for 2014 and 2015.

According to CB’s claim, Callidus had a deferred bonus program where a portion of the annual bonuses was withheld and distributed over the following years. This structure was designed to “smooth out” income over time. For the years in question, CB had received bonuses equivalent to three times his base salary, but a significant portion of these bonuses was withheld under this program.

Specifically, for the year 2014, half of the withheld amount was not paid to him, and for the year 2015, none of the withheld amount was paid.

For stock options, CB was awarded a total of $1,213,856.98. This figure represents compensation for stock options that he claimed he was entitled to upon his retirement, but which were not vested or exercised due to his departure from the company.

CB argued that as part of his compensation package, he was entitled to stock options that should have vested upon his retirement. He claimed that these options were integral to his compensation and should not be forfeited due to his departure from the company.

The court agreed with that claim, finding that under his employment contract, he was entitled to have all outstanding options vest upon retirement and be exercisable within 180 days. The court concluded that Callidus had not provided him with a copy of their Deferred Bonus Policy or communicated that he would not be paid for earned and deferred bonuses after his employment ended.

The damages awarded to CB for the lost stock options were calculated based on the difference in value between the grant price of each option and the market price as of Jan. 16, 2017. This was the date that the court found CB would have exercised his vested options had they been properly vested upon his retirement.

Retirement, not constructive dismissal

However, the court did not find in favor of CB on all counts. It concluded that he was not constructively dismissed, as his departure was characterized as retirement, thus impacting the claim for wrongful dismissal damages.

Justice Morgan stated, “When I consider the evidence of (CB), I conclude that there is no genuine issue requiring a trial in relation to whether (he) was constructively dismissed.”

For more information, see Boyer v. Callidus, 2024 CanLII 96 (ON SC)

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