Home Employment Contracts New Brunswick court upholds $2 million award to hospital CEO who was fired by the Premier at a press conference

New Brunswick court upholds $2 million award to hospital CEO who was fired by the Premier at a press conference

by Todd Humber

A court has upheld an adjudicator’s decision that awarded the former president and CEO of New Brunswick Horizon Health Network more than four year’s pay and $200,000 in aggravated damages after he was publicly fired by Premier Blaine Higgs at a news conference.

Dr. John Dornan was hired on a five-year fixed-term contract, at an annual salary of about $385,000, but was terminated just four months into his role. The termination came as part of a major health-care leadership shakeup after a patient died in the waiting room of the emergency department at Dr. Everett Chalmers Regional Hospital.

An Adjudicator, mutually chosen by both parties, found Dr. Dornan entitled to damages for the premature end of his five-year term, including lost salary, benefits, and an additional $200,000 in aggravated damages — adding up to more than $2 million.

The Horizon Health Network sought to overturn this decision through a judicial review, challenging the Adjudicator’s findings on several grounds, including errors in analysis concerning consideration, mitigation, aggravated damages, procedural fairness, and jurisdiction.

However, the Court of King’s Bench of New Brunswick upheld the reasonableness of the Adjudicator’s decision, dismissing the Network’s application.

A contentious point was the introduction of an affidavit by Keith Mullin, former counsel to the Employer, which Dr. Dornan objected to as it introduced evidence not presented to the Adjudicator.

The Court ruled that while some extrinsic evidence can be admitted under special circumstances, it did not significantly affect the decision in this case.

Termination clause added, no consideration

The crux of the dispute revolved around a written agreement sent to Dr. Dornan after his appointment, which included a termination clause not discussed during the initial verbal agreement.

The Adjudicator found this modification unenforceable due to lack of consideration, a decision the Court found not unreasonable, despite the Employer’s argument that New Brunswick law does not require consideration for modifications to employment contracts.

The court also rejected the employer’s argument that the addition of the termination clause was a net benefit to Dr. Doran because it gave him the right, as well, to terminate the agreement with 90 days’ notice. The employer also argued that the agreement to pay the doctor’s licensing fees also constituted consideration, but that also failed.

“I find that these are findings of fact or mixed fact and law and are not reviewable on a reasonableness standard of review; deference is owed to these findings,” it said.

Mitigation and aggravated damages

Regarding mitigation and aggravated damages, the Adjudicator ruled in favor of Dr. Dornan, finding no evidence he failed to mitigate his losses and that the manner of his termination warranted aggravated damages.

The Employer challenged these findings, arguing for a duty to mitigate losses even in fixed-term contracts and deeming the awarded aggravated damages excessive. Nonetheless, the Court found the Adjudicator’s decisions reasonable and aligned with legal standards.

It noted that the Adjudicator found the manner of termination warranted significant aggravated damages because “it would be reasonable for a member of the public to conclude that the Premier had concluded the grievor was responsible for this unfortunate death.”

“Furthermore, the only conclusion to be reached from this news conference was that the announced termination of the grievor was directly related to the unfortunate death. In my view, these comments were made without proof and caused unjustified harm to the professional reputation of the grievor.”

Procedural fairness

The judicial review also addressed procedural fairness, with the Employer claiming they were not properly notified of Dr. Dornan’s claim for aggravated damages. The Court concluded that the Adjudicator had considered the necessary factors and that the Employer had ample opportunity to address any claims made by Dr. Dornan.

It also awarded him $4,000 plus HST in costs.

For more information, see New Brunswick v Dornan, 2023 NBKB 225 (CanLII).

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