Dara Fresco v. Canadian Imperial Bank of Commerce, 2009 CanLII 31177 (Ont. Sup. Ct. J.)

In the recent decision in Fresco v. CIBC, Justice Lax of the Ontario Superior Court of Justice dismissed a certification motion by a representative plaintiff seeking compensation for unpaid overtime allegedly caused by CIBC's overtime policies. The Court was not satisfied that there was any evidence of systemic wrongdoing by CIBC. In addition, Justice Lax held there was insufficient evidence that CIBC's overtime policy was illegal and that a class proceeding was not the preferable procedure for resolving the largely individual claims of the proposed class members.

Framing her claim in breach of contract and unjust enrichment, Ms. Fresco brought the class proceeding on behalf of current and former customer service employees working in CIBC branches. It was alleged that CIBC was in breach of its duty to pay all of the proposed class members' overtime wages and to keep accurate records of those payments. The plaintiff attempted to frame her case as one of systemic wrongdoing, which was rejected by the Court.

'The Court noted that Ms. Fresco's claim was an "off-the-clock" case, which alleged that CIBC failed to compensate employees entitled to overtime in the manner required by the Canada Labour Code (CLC). The plaintiff argued CIBC's overtime policy's pre-approval requirement was illegal. She also contended that the policy had been purposely designed to thwart the ability of employees to collect overtime, particularly in light of the allegation that branch employees were customarily unable to finish their basic employment duties within the hours of a standard workday. It was also argued that the "time-in-lieu" option offered to employees under the CIBC overtime policy was impermissible under the CLC. Ms. Fresco pleaded that CIBC also failed to comply with the minimum requirements of the CLC by failing to keep accurate overtime records.

In applying the five-step test for certification, Justice Lax found the representative plaintiff's claim failed to raise common issues to advance the claims of the class members.

Cause of action

CIBC argued that its overtime policy was not illegal and therefore the plaintiff did not meet the first requirement for certification on that issue, namely that there be a tenable cause of action, and that all of Ms. Fresco's proposed common issues relying on a determination of the legality of the overtime policy should be dismissed.

Although Ms. Fresco contended that the preapproval-of-overtime requirement was illegal, no binding or persuasive cases were tendered in support of that conclusion. Upon examination of the relevant provisions of the CLC, Lax J. ruled that such a requirement was not illegal in the context of CIBC's policy. Ms. Fresco's real complaint, in the view of the Court, was not that the overtime policy was illegal, but that it was not properly applied at the branch level. In addition, the Court examined the "time-in-lieu" provisions in CIBC's overtime policy and found them to be legal. Consequently, Ms. Fresco's common issues directed at the illegality of CIBC's overtime policy were excluded. In addition, Justice Lax held that even had she found the overtime policies to be illegal, that would not advance the claims of the class members in any significant way.

Common issues

In considering whether or not there were sufficient remaining common issues in the claim to meet the test for proceeding as a class action, the Court characterized Ms. Fresco's claims as requiring individual specific factual examinations as opposed to determination of the issue on a class-wide basis.

The Court found that Ms. Fresco failed to adduce sufficient evidence that CIBC did or failed to do something that deprived the proposed class members of overtime compensation. The absence of any meaningful commonality between the claims negated any benefit of a class-wide proceeding.

The plaintiff argued that the illegality of the policy was the lynchpin common issue, but in light of the Court's preliminary finding that the overtime policy was not illegal, this was untenable. Furthermore, even ignoring the policy's legality, the Court held that the preapproval requirement in and of itself would not cause the damages alleged. Rather, it was held that any damages would be independent of the policy, and caused by an implementation failure. Such a finding would necessarily be fact-specific and could not be determined on a class-wide basis. In sum, the legality of the policy did not answer the crucial question of whether CIBC was liable for unpaid overtime in the circumstances of the claim. Justice Lax found that there were "a number of individual circumstances that arise for disparate reasons and require additional resolution."

The Court also found that the question of whether or not there was a breach of record-keeping requirements was not a common issue sufficient to materially advance the litigation because there were no causes of action or damages flowing from such a failure. Without evidence of systemic wrongdoing, claims that CIBC either breached employment contracts or was unjustly enriched were not common issues sufficient to justify certification of the class.

With regard to the assertions of a systemic policy, practice and/or experience of unpaid overtime at CIBC, the Court concluded that the affidavit evidence of several proposed class members revealed a variety of individual circumstances and unrelated causes for non-payment of overtime. In Lax J.'s view, these could only be resolved through consideration of the evidence on an individual basis. Instead of common issues, the evidence demonstrated nothing more than a "superficial appearance of commonality that would inevitably break down into individual inquiries."

Finally, Justice Lax found that this was not an appropriate case for aggregate damages to be determined as a common issue, noting that aggregate damages cases indicate that it is to be an aggregate of "potential liability," which refers to "a direct risk of harm wrongfully created by the defendant .rather than to some vaguer probability of liability."