

More hutzpah than brains.

A startling amount of hubris is not the sole purview of Donald Trump. It is sometimes amazing to see what people think they can get away with.

Todd was the vice president of a publicly-traded company in charge of, among other things, real estate transactions. Somebody approached Todd to see if the company would be interested in buying a piece of land. Todd spoke to the majority shareholder and then told the vendor no. The majority shareholder then asked Todd to help him buy the land for his own company which Todd did. That shareholder then sold the piece of land to the company that employed Todd, with Todd’s approval, for $6.5 million more than he had paid for it. Basically, Todd helped the majority shareholder rip off the company for which Todd worked. Todd did not tell this to any of his bosses.

What is important to keep in mind is that Todd had a fiduciary obligation to be honest and disclose all to the corporation. The corporation has obligations of honesty and good faith to all shareholders, not just the one that owns the most shares.

Soon after, when those shareholders learned that the management team had received a huge bonus and raised a fuss, Todd circulated a story hiding the reason the bonuses were paid. Finally, Todd lied to Revenue Canada to decrease the tax burden with respect to those bonuses so that he and all the other managers could pay less taxes.

When all of these things were discovered Todd was terminated for just cause. He had the gall to sue the employer for wrongful dismissal. He argued that the land transaction was condoned by the employer because the majority shareholder asked him to do it and the majority shareholder was, in effect, in control of the company. Of course that is not true. The directors control the company and the majority shareholder can control who the directors are. That does not mean they do not have a fiduciary obligation to all shareholders, not just the one that appoints them, sort of . Think of James Comey.

Todd also argued that the corporate culture was so self-interested and corrupt that within that context his actions were not extraordinary.

The judge at trial made short shrift of these arguments and found that there was clearly just cause for Todd’s termination.

Not one to accept that he could do any wrong, Todd appealed the decision to the Ontario Court of Appeal where he further embarrassed himself by losing again in short order and having to pay $65,000 to the company in costs just for the appeal.

Todd’s case reminds me of a Small Claims Court action I defended many years ago. A waiter had been fired for serving a drink, not ringing it in, and pocketing the cash. In cross examination he tried to take the position that he had innocently forgotten to ring in the drink. When I started to corner him with facts that showed he intentionally tried to cover up the omission, he turned red. When he was firmly in the corner and had nowhere to turn, he blurted, “Well, everyone takes the cash from a drink for themselves once in a while.”

The judge told me to sit down. He turned to the waiter and, barely politely, told him that his case was dismissed and that he should leave the courtroom…quickly.

I have never understood what he thought he was doing bringing his lawsuit nor will I ever understand people like Todd. More hutzpah than brains is the saying that comes to mind.

Ed Canning practices labour and employment law with Ross & McBride LLP, in Hamilton, representing both employers and employees. Email him at ecanning@rossmcbride.com For more employment law information; www.hamiltonemploymentlaw.com
Ed Canning
Ed Canning
P: 905.572.5809