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Dial “D” for Dismissal: Employee Fired after “Pocket-Dial”

Most people have received (or sent) a “pocket-dial”, which is an unintentional cell phone call that is made by a phone when it is in a person’s pocket. In a recent decision from Alberta, an employee’s pocket-dial revealed that he was performing work for his own personal business on company time, leading to his dismissal for cause.

In Ross v IBM Canada Limited, the plaintiff, Mr. Ross was hired by IBM as a senior salesman, with a base salary of $140,000, and an expected total remuneration, including commissions of $193,000. During the recruitment process, Mr. Ross informed the company that he and his wife owned a company called Compartment Inc. that designed, manufactured, sold and installed custom residential storage units. Mr. Ross had been responsible for the operation of the business, while his wife had handled administrative duties. However, he advised IBM that he would transfer the operational duties to his wife when he commenced employment with IBM.

Mr. Ross was made aware of IBM’s Business Conduct Guidelines. The Guidelines prohibited the performance of non-IBM work while working on IBM time, and the use of IBM assets, including equipment like telephones for any outside work. The Guidelines warned that a violation could lead to disciplinary action up to and including termination.

Mr. Ross worked primarily out of his home, although he had access to IBM office space, which meant that he was not closely monitored by his employer. On January 21, 2011, Mr. Ross had a scheduled call with his supervisor. He advised his supervisor that he was double-booked and could not participate in the call. That afternoon, Mr. Ross pocket-dialed his supervisor, who overhead two conversations between Mr. Ross and a subcontractor related to work for his personal company, Compartment Inc.

Mr. Ross’ supervisor had a conversation with him after the pocket-dial incident. During this conversation, Mr. Ross admitted that he had performed work for Compartment Inc. However, he asserted that he only spent three hours a week working for Compartment Inc., and that he tried to do this while on his lunch hour. Mr. Ross’ employment was terminated a week later for cause. Mr. Ross subsequently commenced an action for wrongful dismissal.

The Alberta Court of Queen’s Bench upheld the dismissal for cause. The Court found that Mr. Ross violated IBM’s Business Conduct Guidelines by performing non-IBM related work during business hours. There was a dispute as to whether he advised his supervisor that he worked three hours a day, not three hours a week, on his personal business. The Court found that he had initially advised his supervisor that he worked three hours a day on his personal business, but had misspoken. Although the Court noted that there is a difference between three hours a day verses three hours a week, it found that spending three hours a week on one’s personal business is a significant breach of the employment relationship.

In coming to its conclusion, the Court noted that this was not an isolated incident. Mr. Ross had admitted to working on his personal business for three hours per week on a consistent basis. It also found that since he was a senior employee, working autonomously where the working relationship was imbedded in an honour system, IBM was not required to provide him with a warning and an opportunity to improve. His conduct irreparably damaged the employment relationship.

Just cause is a difficult standard for employers to meet. Key to the employer’s success in this case was its clear policies, outlining its expectations on employees and the consequences of a breach. In addition, the fact that the employee held a senior position and worked from home, where he was not easily monitored, were important to the Court’s determination that he should be dismissed without further warning.

This blog was first published on First Reference Talks.

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