Career choices are in effect personal decisions to invest time and effort in a particular endeavour in order to pursue a particular goal.  Career decisions which do not work out as planned or anticipated are no more actionable than investment decisions which do not work out.  There has to be an actionable wrong on the part of some person or entity.

The Honourable Justice Allan P. Boudreau, para 97

Background

The plaintiff in this case had been an investment adviser since 1984.  In 1996, he was working for Richardson Greenshields when RBC-Dominion Securities (“RBC”) purchased the business.  Soon after, the plaintiff was approached by the regional manager of Midland Walwyn (“Midland”).  The plaintiff decided to move to Midland and signed a detailed employment contract.  During contract discussions, the plaintiff claimed that the parties agreed he would start with a Length of Service (“LOS”) of zero because he could not be certain how many clients would follow him from RBC to Midland.  In general, the LOS is the number of years an employee has spent with an employer. However in the financial services industry, the LOS typically indicates the total years of experience in the financial services career path. The highest an LOS can be is 10.  This alleged agreement was not mentioned in the signed contract.

After three years with Midland (which was purchased by the defendant, Merrill Lynch, during that time), the plaintiff’s “Length of Service” was set at 10.  The plaintiff protested this, but it was never resolved.  Eventually, Merrill Lynch’s operation was purchased by CIBC-Wood Gundy (“CIBC”) in 2002.  The plaintiff was transferred to CIBC and a new employment contract was signed.

Was there a valid collateral agreement?

Although the court said “yes”, Justice Boudreau said the plaintiff failed to prove that the collateral agreement was as specific as he claimed it to be in terms of the LOS progression.

The thrust of the plaintiff’s claim was that the change in his LOS designation to 10 by Merrill Lynch after only three years’ employment was a breach of his “collateral” contract or agreement with Merrill Lynch.  Alternatively, he claimed that the manner of his transfer of employment from Merrill Lynch to CIBC in 2001 – 2002 was a constructive dismissal.  He claimed that he had no choice but to resign from CIBC in 2004 primarily because of his LOS designation and he claimed damages ranging from $1.3 million to $3 million.

The court said there was a valid collateral agreement between the plaintiff and Midland where he would start his career with Midland at LOS (0), but that was as far as the court went in making a deciding for the plaintiff.  The court said:

  • The plaintiff failed to prove that the collateral agreement was specific that his LOS designation would progress from LOS (0) to LOS (10) by only one category annually during his period of employment with Midland.

The court went on to provisionally decide whether the plaintiff had proven any damages caused by his designation change from LOS (2) in 2000 to LOS (10) in 2001 saying the plaintiff failed to prove that the change was the proximate cause of a decrease in his income.

Constructive Dismissal

The court said no, saying that the plaintiff had two options in November 2001:

  • He could refuse to transfer to CIBC and claim constructive dismissa from Merrill Lynch; or
  • He could transfer to CIBC to mitigate his damages, and later pursue Merrill Lynch for constructive dismissal.

The plaintiff opted to accept employment with CIBC and resigned from Merrill Lynch.  In so doing, the plaintiff realized immediate benefits (i.e., he did not have to repay a balance left on a forgivable loan with Merrill Lynch and he retained any vested stocks or stock options).  Later, he received a forgivable loan from CIBC.  He also retained his “book of business” when he moved to CIBC.  Ultimately, the plaintiff accepted employment with CIBC and resigned from Merrill Lynch; working at CIBC for two years until he resigned in 2004.  While at CIBC he earned annually $102,790 and $105,541.  Because of this, the court said:

…In the circumstances, any allegation of constructive dismissal is without factual foundation.

Reasonable Notice

As for the extraordinary reasonable notice claimed by the plaintiff (ranging from $1.3 million to $3 million), the court said:

Even if one had found constructive dismissal, any reasonable period of notice required of Merrill Lynch would have been substantially less than 24 months, especially considering that Mr. Blackman’s entire employment period with Midland/Merrill Lynch was approximately 48 months.  Moreover, Mr. Blackman was employed at CIBC for more than 24 months after, transferring from Merrill Lynch.  Considering the latter, and Mr. Blackman’s employment over his 24 plus months at CIBC, Mr. Blackman could not prove any additional damages.

We started with Justice Boudreau’s quote about career choices being personal decisions and end with a quote a little further along in the decision:

I have found that the above-noted result was not ‘caused’, in the legal sense, by Mr. Blackman’s LOS designation either at Merrill Lynch or at CIBC.  Therefore, the change in Mr. Blackman’s LOS designation from LOS (2) to LOS (10) while at Merrill Lynch is not actionable in law.  Mr. Blackman decided to not pursue a Production Improvement Plan as offered by CIBC, but he decided to resign instead and pursue other career opportunities.  While one can sympathize with Mr. Blackman’s situation, it is primarily the result of employment decisions which he made along the way.

What is the takeaway from this decision?

The litigation arising from the plaintiff’s employment with Merrill Lynch and CIBC (he also claimed he had been “squeezed out the door” of CIBC) led to a number of pre-trial court appearances and press coverage.  The legal proceedings had been ongoing as far back as 2004.  It may not be over yet as it is uncertain whether the plaintiff will appeal.

One thing is clear.  Courts are increasingly telling litigious employees that they must not be hasty in alleging constructive dismissal.  We wrote earlier this week about a case involving an employee who claimed that an offer of a lateral position, but with no supervisory responsibilities was a constructive dismissal.  In that case, the court said there was no constructive dismissal and the employee should have given more consideration to the offer rather than simply reject it.  There is a similar message in Blackman v. Merrill Lynch Canada. Courts should be reluctant to have sympathy for former employees who simply choose to resign and take the position they have been constructively dismissed, as Justice Boudreau said:   “Career decisions which do not work out as planned or anticipated are no more actionable than investment decisions which do not work out“.