West Care Pharmacy Std. and Shirin Bhimani v. Swiftrx Ltd., Minit Drug Company Ltd., NC Britton Holdings Ltd. and Barney Britton

Court of Queen’s Bench of Alberta, 2008

Facts:

West Care Pharmacy Ltd. (“West Care”) was created by the plaintiff Shirin Bhimani (“Bhimani”), who was also its principal officer. The defendant SwiftRx Ltd. (“SwiftRx”) was solely owned and controlled by the defendant Barney Britton (“Britton”), who was also the sole owner and controller of the defendants Minit Drug Company Ltd. (“Minit”) and NC Britton Holdings Ltd. (“NC”).

West Care and SwiftRx entered into an Asset Purchase and Sale Agreement (the “Agreement”) by which the business and assets of the online pharmaceutical company West Care were transferred to SwiftRx. In addition to the assets and business sold, the Agreement provided that SwiftRx would employ Bhimani as a pharmacist at an annual salary of $100,000 for two years, based on a four day work week to accommodate her MBA studies. The Agreement also provided that Bhimani agreed to be employed by SwiftRx for this two year period. The Agreement also contained a non-competition agreement stating that Bhimani could not compete in the mail order pharmaceutical business for two years.

Bhimani began employment with SwiftRx, although the majority of her work was for Minit. After fourteen months, Bhimani submitted a written proposal regarding her future with the venture, and her potential role following the end of her two-year contract. Bhimani and Britton met to discuss this proposal and some complimentary concert tickets were received by Bhimani. This meeting culminated in a decision that the parties no longer wished to work together and the terms of the separation would be agreed upon at a later date. The following day, Bhimani received a letter from Britton asking her to vacate the premises. Bhimani spoke to Britton on the telephone and agreed to stay off the premises until his return. Britton said he would contact Bhimani on the following Monday but never called her again.

Bhimani sought part-time employment that would accommodate her school schedule and after 3 months of unemployment, found a relief position as a pharmacist for 2 days per week.

Issues:

The employment issues in this case were whether SwiftRx was in breach of the Agreement for prematurely terminating Bhimani’s term of employment, and whether Bhimani failed to mitigate when she chose not to seek full-time employment.

Decision:

Bhimani was constructively dismissed. Although she agreed to discuss the possibility of terminating her employment contract following her meeting with the Brittons, no terms were formally agreed upon and she returned to work the following day with the expectation of continuing her position until such agreement was reached. Bhimani stayed off the premises based on Britton’s promise to call her, a promise Britton acknowledged he did not fulfil. This entitled Bhimani to assume the terms of the Agreement had been substantially altered and she had been unilaterally terminated.

The Agreement contained no express provisions regarding severance payments, obligations to continue payment, or waiver of the duty to mitigate, and therefore Bhimani had a duty to mitigate despite the fixed term of the Agreement.

The Agreement, however, provided for a four-day work week, and on reliance on this Agreement, Bhimani enrolled in an MBA program. It was therefore reasonable for Bhimani to seek alternate employment in her field that did not prohibit her from continuing her studies.