When too much honesty turns to trouble

It was 2015 and the price of oil was plummeting. Things were getting tougher in that sector and one day Donna had a meeting with staff in which she told them that staffing cuts were coming and that they would be well-advised to start looking for other opportunities. A few days later one of her reports , Suzanne, told her that she was thinking of putting a proposal to the company on her own behalf for a safety program that would compete with an outside party’s bid for that program. Suzanne had seen the details of that bid. Donna immediately cautioned her that it may be a conflict of interest for her to engage in any counter-bid when she had already had access to confidential information from her potential competitor. Donna was so concerned she immediately talked to in-house legal counsel about the issue who confirmed that it was a potential conflict. Donna told Suzanne legal counsel’s concerns but unbeknownst to Donna Suzanne went ahead and submitted the bid even though she was still an employee. Around this time, without knowing Suzanne had submitted the bid, Donna disclosed to her that she was disappointed in her performance and had decided to terminate her in the near future and that Donna’s boss agreed with the decision.

Soon after an investigation was launched by the company of Suzanne’s bid for the safety project and Donna told her that it looked like the investigation was going to lead to Suzanne’s termination.

When the Employer found out about this last conversation it turned it’s investigation on Donna without telling her she was actually being investigated. Donna was terminated without a severance package. The Employer claimed it had just cause because Donna had displayed a lack of understanding of conflict of interest issues and had breeched confidentiality by disclosing to her team that cuts were coming and telling Suzanne that Donna’s boss agreed with the plan to terminate her and then telling Suzanne that she was being terminated as a result of the investigation. With respect to the team meeting where Donna told them to start looking for work, the judge was not persuaded. Donna knew that she had been told to cut $100 million from her department’s budget and that directive was confidential. Given the fact that the oil industry was in a freefall, however, nobody could have been surprised that their employment was tenuous. The judge said if there was a confidence breeched it was not much of a confidence. The judge was not persuaded that Donna did not understand breeches of conflict. In fact Donna immediately identified a potential issue and spoke to in-house legal counsel about it. It is not clear what more the Employer wanted her to do other than caution the employee. Donna did not have her boss’ permission to disclose his consent to her plan to terminate Suzanne for performance issues. She should not have done that. The breech of confidentiality, however, was marginal. Lastly, Donna should not have told Suzanne before the investigation into the conflict of interest issue was finished that she would likely lose her job as a result of the investigation. The fact was, it was the truth and Suzanne did lose her job the same day that Donna did.

Donna won her case and was awarded significant damages. Although Donna may not have behaved as perfectly as the employer wanted her to, nothing she did was in her own self-interest. Everything she did was in the interest of honest and transparent communication. It is difficult to persuade a judge that telling the truth is just cause for termination. Donna broke some rules and perhaps the employer saw what they thought was an opportunity to help cut the budget. That was a mistake.