Canadian Employment Law Today

April 30, 2014 | Canadian Employment Law Today Canadian HR Reporter, a Thomson Reuters business 2014 gued she couldn't have known without the associate telling her — and the associate later testifi ed she didn't realize the move counted as a transaction. She also pointed out that the associate was in her portfolio because CIBC had directed her to include the associate a few years earlier. Ogden was also concerned that, as a fi nal warning, there was reference to the 2008 loan rate incident — which the vice-president had told her would not aff ect her future. When Ogden challenged the letter, it was revised to say future misconduct "could" result in termination instead of "will." Ogden still disagreed with the warn- ing letter, but she had found out she was pregnant and didn't want to pursue it. Snap judgment to help client in middle of the night Early in the morning of Sept. 9, 2010, Og- den received a phone call from a client who needed to wire $100,000 from China to her account or she would lose a deal on a new home in Vancouver. She needed two ac- counts to transfer $50,000 each — Chinese regulations prevented transfers of more than $50,000 out of China — so she asked Ogden if she could transfer the money to two of Ogden's accounts. is practice was common in China, where bankers and cli- ents had close relationships. Ogden thought quickly about it and didn't think there was any problem, so she agreed and moved the funds to the client's Canadian account the next day. In October, the transaction came to light in a review of transactions. A further in- vestigation was launched and the corpo- rate security investigator interviewed Og- den on March 15, 2011. e investigator took the position it was a very serious issue and Ogden felt intimidated. e investiga- tor discussed the transaction and the code of conduct, but didn't inquire as to the circumstances of the incident that pushed Ogden to make the decision. e investigator reported to a manage- ment panel, which felt it was important for CIBC to control Ogden's exit rather than let her resign — the panel was aware of Ogden's unhappiness with the discipline letters and wanted to keep her substantial portfolio. Ogden's employment was termi- nated for cause, fi nding she had breached the higher level of trust expected of bank employees. No opportunity to improve e court noted Ogden was entitled to time and opportunity to improve her per- formance after a fi nal warning is issued. However, the decision to terminate came because of the wire transfer, which hap- pened before the fi nal warning was given following the mortgage incident. ere was no misconduct between the fi nal warning and the termination, said the court. Additionally, the court found the prior incidents on Ogden's record — the loan rate incident, clothing gift incident and mortgage incident — all had reasonable explanations and either did not occur or did not justify discipline. As a result, only the wire transfer incident could form a ba- sis for just cause, said the court. e court also found the confl ict of in- terest provision in CIBC's code of conduct was vague and open to confusion, and the only training employees received was an annual online course. Because there was no clear rule, Ogden was forced to use her judgment for the wire transfer — in circumstances in the middle of the night, with a panicked client and no one to con- sult for advice. at judgment led Ogden to honestly conclude there was no problem with the transaction, said the court. In ad- dition, Ogden received no benefi t from the transaction and CIBC acknowledged there was no actual confl ict of interest — which was the focus of CIBC's policy. e court noted CIBC had the informa- tion about the wire transfer in October 2010, but Ogden was allowed to continue in her job until her termination in March 2011. is meant CIBC didn't have any se- rious concerns about trusting her to deal with high-level clients in her position. e court also found CIBC applied its policies inconsistently, as there were "nu- merous breaches of clear and unambigu- ous rules" by CIBC employees and man- agement — such as the associate's input of her own data on her application — which went undisciplined. e court found the wire transfer inci- dent did not constitute serious misconduct — or misconduct at all — that constituted just cause. Additionally, it's treatment of Ogden in pursuing discipline in the previ- ous incidents as well as the unfair inves- tigation of the wire transfer was a breach of its duty of good faith, particularly since such a dismissal was likely to prevent Og- den from fi nding another job in the fi nan- cial services industry. " e consequences in this case were so devastating to Ms. Ogden — and CIBC knew they would be — that the bank had a higher level of responsibility to get it right before making a decision that would have such a severe fi nancial, professional, and emotional impact to Ms. Ogden," said the court. "Failing to ensure the (management) panel had complete and accurate informa- tion, and forging ahead with a termination despite having a heightened responsibility to get it right, was cavalier, reckless and negligent." e court found CIBC was liable for breach of contract, unjust dismissal, and compensatory damages for bad faith, along with aggravated and special damages. e amount of damages were to be determined at a later trial. For more information see: • Ogden v. Canadian Imperial Bank of Com- merce, 2014 CarswellBC 447 (B.C. S.C.). About the Author JEFFREY R. SMITH Jeffrey R. Smith is the editor of Canadian Employment Law Today. He can be reached at jeffrey.r.smith@thomsonreuters.com, or visit www.employmentlawtoday.com for more information. CREDIT: REUTERS/MARK BLINCH

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