If you do not have just cause, don’t pretend that you do

No other explanation was given and Sheldon was told that he would receive a severance package. But, that did not happen. My guess is that the next thing the brothers did is speak to an Employment Lawyer about how much it might cost to terminate a President of a company in their late 50s who is making $300,000.00 a year. Obviously they were surprised at the answer because they took the position that there was in fact just cause for Sheldon’s termination. After his departure they had discovered, they said, 3 issues that warranted his termination without notice. What they were claiming was after acquired cause and that can happen. If you terminate a cashier because the business is slow but discover the next day he has been skimming from the till you don’t have to pay him a severance. Even if you did not know about his dastardly doings at the time of termination, it still happened. 

Sheldon’s employer claimed that they had no idea he was having the company pay for his life insurance. They knew there was insurance but had always understood that he was reimbursing the company for the premiums. He owed them, they said, almost $200,000.00. They said that Sheldon did not tell them about a 6 million dollar write-off the company had claimed for a bad debt and that this constituted a breech of trust. Lastly, they discovered that he had described himself as a Chartered Accountant on the resume he had submitted to get the job when in fact his membership in that organization had lapsed. Only one of the brothers took the stand at trial and he tried to portray himself as a simple Optometrist who was relying on Sheldon. He found it hard to read the financial statements and claimed Sheldon did not properly explain things to him. It did not work. With respect to the life insurance, the beneficiary if Sheldon died while employed was in fact the company so it is somewhat unfathomable why Sheldon should be paying for it. The fact that these premiums were being paid by the company was clearly recorded in every monthly financial statement and yet the employer claimed to be surprised. The same situation applied to the 6 million dollar write-off. It was clearly recorded in all the books and in fact resulted in the company not having to pay income tax that year. 

The judge’s incredulity with respect to the claim that Sheldon deserved to be fired because he was not in fact a paid up Chartered Accountant in good standing at the time he applied was clear in the decision. Sheldon had been a CA in the past but had decided not to keep paying the yearly fees since he was not applying for any jobs where that formal accreditation was required. It was clear that the claimed accreditation had nothing to do with why Sheldon was hired in the first place but rather his extensive business experience. Sheldon was awarded 18 months notice and the cost of litigation. 

The lesson for employers from Sheldon’s story is this: If you do not have just cause, don’t pretend that you do. It only irritates judges and makes things worse.