November 23, 2015
The employee was hired in 2010 into a senior sales position with IBM (the ’employer’). Although the employee had access to office space, his role was substantially based out of his home. At the time of his hiring the employee disclosed to the employer that he had a privately held business which designed and sold residential storage units. He undertook to transfer operational responsibilities of the business to his wife.
The employer had a set of Business Conduct Guidelines, which were a condition of employment that the employee understood and agreed to abide by. One of the guidelines required employees to avoid conflicts of interest, which included using the employer’s time and assets for outside work.
The employee had regular electronic and phone communication with his supervisor, including a standing weekly call. On January 21, 2011, about 6 months after his hiring, the employee canceled his weekly call, stating that he was overwhelmed with work. The same afternoon, the employee unwittingly pocket-dialed his supervisor two times in a row, during which his supervisor overheard his conversation with a subcontractor related to his private storage unit business. The employee also failed to respond to work emails that afternoon.
Ten days later the employee met with his supervisor, and was reminded of the conflict of interest guidelines. He admitted to working about 3 hours per week on his family business. The employee was subsequently terminated for cause.
The employer bears the onus to establish that an employee’s termination for cause is justified. The Court accepted that the employee spent only 3-4 hours per week on his private business, but also found the evidence established that he solicited business and performed work connected to remuneration for his business during IBM time, and that this was a significant breach of the employment relationship. Further, a breach of this magnitude did not require the employer to give a warning to the employee, and an opportunity to improve his conduct.
Employees should be aware of their workplace policies and expectations regarding outside work, and avoid conflicts which could lead to termination for just cause.