ADM Measurement Ltd. v Bullet Electric Ltd., 2012 ABQB 150, [ADM]

The facts in ADM were complex, though the parties were unsophisticated, but experienced, businessmen in the oil and gas business. The actual litigants were Mr. McCullough, the plaintiff, who was the owner and operator of ADM, and Mr. Young, the defendant, who was an employee until the date of termination, and only joined Bullet Electric Ltd. following his termination.

Mr. Young joined ADM in 1997, and he and Mr. McCullough were good friends. Mr. Young was a valuable employee and occupied a management position when he was terminated. One of the terms of his employment was that Mr. Young would benefit from a profit-sharing program and when he was able purchase the business, Mr. McCullough would sell it to him. The dispute arose in September 2000, when Mr. McCullough offered to sell the business to someone else, instead of Mr. Young.

Justice A.W. Germain concluded that Mr. McCullough’s unilateral withdrawal of the right to purchase ADM was a fundamental and substantial change to the employment contract and therefore constituted constructive dismissal. Justice Germain went on to state:

"there is a recognized benefit that flows from the chance to do something...and that removal of this benefit is in fact a real loss of something that was integral to the contract between ADM and Mr. Young (at para 136)."

The termination through constructive dismissal was made without cause and there was no adequate notice, therefore Mr. Young’s termination was wrongful.

Justice Germain found Mr. Young did not owe any fiduciary duty to ADM but concluded that, even if he had found there was such a duty, that the effect of the constructive dismissal was to remove any possible restrictive covenant.

Finally, ADM also alleged that Mr. Young and Bullet Energy Ltd. had interfered with ADM’s contractual relationships. Justice Germain plainly rejected this argument for the simple reason that:

"while ADM and its clients interacted on a contractual basis, those contracts were for individual ‘piece-work’ tasks. Any long-term interaction between ADM and the oil patch businesses was informal, not contractual (at para 162)."

He concluded neither Mr. Young, nor Bullet Energy Ltd. interfered with ADM’s contractual relationships.