Law Firm Ordered to Pay Articling Student $100,000 for Loss of Opportunity, $50,000 Aggravated and $25,000 Punitive Damages

Author: Mike Weiler, KSW Lawyers Employment & Labour Group (mweiler@ksw.bc.ca)

A BC law firm terminated an articling student and alleged just cause. The trial judge found that there was no just cause and that the law firm’s conduct in dismissing the employee was “unfair and unduly sensitive.” The conduct included starting an action accusing the Plaintiff of theft, breach of contract, wrongful use of marketing materials, dishonesty and trespass, and then serving the Plaintiff with her termination papers and law suit in front of her classmates at her Law Society courses to ensure a “public firing.” The trial judge found this conduct to be “unnecessary and psychologically brutal” and awarded the Plaintiff $18,934 general damages and $50,000 aggravated damages.

The law firm appealed the decision on just cause to the BC Court of Appeal (BCCA), who recently released their decision in Ojanen v Acumen Law Corporation, 2021 BCCA 189. What could possibly go wrong? Plenty!

The BCCA dismissed the law firm’s appeal and upheld the decision that there was no just cause. In addition it allowed the cross appeal of the employee and awarded the following damages:

  1. $100,000 for loss of opportunity to become a lawyer.
  2. $25,000 punitive damages ordered against the law firm and it’s principal.
  3. $18,934 general damages.
  4. $50,000 aggravated damages.
  5. Costs.

Here are some highlights.

JUST CAUSE

The issue of cause arose because the law firm found what they characterized as a competing blog that they believed the Plaintiff was running. They jumped to the conclusion that she was setting them up to go into competition. The blog was in fact started by the Plaintiff’s husband but she was in fact aware of it. However it was also found it was not a competing blog nor was the Plaintiff looking to set up in competition. In fact she was recommending to people who accessed her blog that they use the Defendant law firm.

The law firm argued that the special relationship between a law firm and an articling student whereby the law firm must assess the character of the articling student so as to be able to provide a declaration of good character at the end of articles as required by the Law Society of BC. Since the principal here could no longer trust the articling student the fundamental trust relationship had been damaged thus supporting a finding of just cause. The BCCA dismissed this argument:

Common law employment principles can be readily applied to the employment relationship between a principal and articled student. The relationship does not require different law principles or a unique application of the usual common law employment principles.

The court upheld the trial judge’s decision applying the contextual approach as mandated by the Supreme Court of Canada in McKinley v BC Tel 2001, SCC 38 that there was no just cause and that the Plaintiff was entitled to damages.

DAMAGES FOR LOSS OF OPPORTUNITY

Damages in a wrongful dismissal case are assessed by putting the Plaintiff in the same position financially as if the employer had not wrongfully dismissed her. The damages assessed must be in the reasonable contemplation of the parties. Normally a court defines the notice period and then calculates the loss resulting from the failure to give notice. But that limitation no longer applies as today “the law recognizes that some employment contracts involve more than the provision of services for remuneration and damages flowing from a wrong dismissal may take that fact into account” [para 57 quoting Machen v Dams Ford].

In this case the unusual factor was that an articling student must complete their Professional Legal Training Course (“PLTC”) in order to be admitted to the bar and practice law. The Plaintiff here was unable to complete her PLTC course. The law firm made a report to the Law Society against her. Because of the wrongful termination of her employment, together with the allegations made against her in the court proceedings, and the report to the Law Society the Plaintiff was unable to purse her legal career at least while these accusations against her “remained in play.”

The trial judge felt that it was too speculative to award damages for this lost opportunity but the BCCA disagreed. She was entitled to compensation for the loss of the opportunity to become a lawyer at the end of the articling period. The fact that such a calculation of damages is somewhat uncertain nevertheless an award of damages should be made:

An award for loss of opportunity is, by its very nature, a matter of assessment, as it is impossible to say with certainty what would have happened absent the wrongful dismissal. The assessment must consider the likelihoods of various possibilities as well as positive and negative contingencies. For example, on the negative side, Ms. Ojanen might have never passed PLTC and thus never become a lawyer even if she had not been wrongfully dismissed. Even if called, she might have chosen not to practise law. Not all called lawyers go on to practise law. On the other hand, Mr. Doroshenko, less than three months into Ms. Ojanen’s articles, was sufficiently impressed with her abilities that he made clear he wanted her to remain with the firm after her articles and that there would be plenty of work available to her. She received a favourable performance review just before commencing PLTC. Her calculations, based on $1,000 weekly earnings, are modest.

 

[70] I am satisfied that Ms. Ojanen has established on a balance of probabilities that she is entitled to an award for loss of opportunity. The award cannot be calculated with mathematical precision. In the circumstances of this case, I would award her $100,000 for loss of earning capacity.

PUNITIVE DAMAGES

At the BC Supreme Court level, the trial judge made no mention of the Plaintiff’s claim for punitive damages. Punitive damages are intended to punish and the object of such an unusual award are “… denunciation, deterrence and retribution” whereas aggravated damages are compensatory. Awards for punitive damages are rare. This was one of those rare cases.

The BCCA however found that the law firm’s misconduct warranted such an award:

The following conduct of Acumen and Mr. Doroshenko stands out as unfair and unduly insensitive:

a) Mr. Doroshenko decided to dismiss Ms. Ojanen without asking her about her involvement with the Blog and her intentions in undertaking it. He had not told her that internet postings that trenched on Acumen’s practice interests were forbidden. When he learned of the Blog, he jumped to a conclusion that she was setting herself up in competition with Acumen. It should have been obvious to him from Ms. Ojanen’s email of September 14, 2016 that her intention was to refer work to Acumen as the opportunity arose;

b) The decision to serve Ms. Ojanen in front of her classmates at PLTC was unnecessary and psychologically brutal. Ms. Ojanen lived a short walk from Acumen’s office. Mr. Doroshenko knew her address. In his evidence, Mr. Doroshenko suggested that he made the decision to serve Ms. Ojanen at PLTC because the server could not locate her at home. This is manifestly untrue. The notice of civil claim was filed on September 16 and Ms. Ojanen was served before classes were done for the day. This was a deliberately public firing;

c) In the termination letter and the notice of civil claim served on Ms. Ojanen on September 16, Acumen and Mr. Doroshenko accused her of deceit and dishonesty. These accusations were harsh and unwarranted. The only basis for these accusations were unfounded suspicions;

d) The obvious probable consequence of the termination, lawsuit, and Mr. Doroshenko’s report to the Law Society, was to render Ms. Ojanen unemployable in the legal profession for so long as the allegations against her remained in play;

e) Acumen and Mr. Doroshenko have persisted in unfounded allegations against Ms. Ojanen through the litigation process to this trial, three years later.

[129] The usual power imbalance between employer and employee was accentuated in this case. Ms. Ojanen was a young woman without local contacts in the legal profession. Mr. Doroshenko was the head of an established law firm. Ms. Ojanen was terribly vulnerable. Mr. Doroshenko was possessed of reputational capital and financial resources. He was not content simply to fire her but took full advantage of his favoured position to launch a campaign against Ms. Ojanen through this lawsuit.

[130] In short, Mr. Doroshenko’s response on discovering the Blog was disproportionate and bullying. I find that he was determined to protect Acumen’s competitive position by making an example of Ms. Ojanen.
[Emphasis added.]

The BCCA awarded $25,000 damages. It noted that absent the awards for general and aggravated damages the punitive damage award would have been higher.

Both the aggravated damage and punitive damage awards would be non-taxable and therefore of much more value to the Plaintiff.

Note to Readers: This is not legal advice. If you are looking for legal advice in relation to a particular matter or drafting of workplace vaccination policy, please contact Mike Weiler at mweiler@ksw.bc.ca.

Mike Weiler is senior counsel with the Employment & Labour Group at KSW Lawyers (Kane Shannon Weiler LLP). Mike specializes in labour law and helping unionized employers, and has more than 35 years of experience practicing employment, labour and human rights law, and related areas, including governance and shareholders rights (and corporate defences to same). He represents employers, management, executives and other senior employees.

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