Canadian HR Reporter

CANADIAN HR REPORTER CANADIAN HR REPORTER May 19, 2014 May 19, 2014 EMPLOYMENT LAW EMPLOYMENT LAW 5 6-month notice of resignation upheld 6-month notice of resignation upheld for BlackBerry executive keen to join Apple for BlackBerry executive keen to join Apple Ontario court agreed contract provision was reasonable Ontario court agreed contract provision was reasonable to allow for transition of important position to allow for transition of important position A former BlackBerry executive has been ordered by an Ontario court to give his employer six months' notice of his resignation. Sebastien Marineau-Mes was a long-time employee at QNX Soft- ware Systems, a software company acquired by Waterloo, Ont.-based BlackBerry. Marineau-Mes stayed on with BlackBerry and, through a series of promotions, reached the position of senior vice-president, software, by early 2013. In the fall of that year, he was off ered another promotion to ex- ecutive vice-president, platform development. In this role, he would be responsible for about 3,000 employees, including 11 vice-presidents and 70 directors. On Sept. 24, BlackBerry gave Marineau-Mes a letter confi rm- ing the promotion and a contract. After his lawyer reviewed it, Mar- ineau-Mes signed the contract on Oct. 16. e employment contract in- cluded a provision that stated Marineau-Mes could resign from his position "at any time upon providing six months' prior writ- ten notice." e provision also stipulated he must provide "active service" during that notice period, unless BlackBerry waived it. He would also receive only his base salary for the six-month notice period plus "reasonable, unpaid expens- es." His benefi ts would stop on the date of termination. Finally, the contract specifi ed that termination "for good rea- son" would not be considered a voluntary resignation. "Good reason" was defi ned as a "mate- rial and detrimental alteration" of his duties or responsibilities, a decrease in his salary of at least 10 per cent, exclusion from any profit-sharing, bonus or other incentive plan, a "material breach" of the contract by BlackBerry or a relocation of his principal offi ce more than 50 km from its current location. BlackBerry didn't announce Marineau-Mes' promotion be- cause it had placed a freeze on promotions earlier in 2013. Only senior executives involved in the decision knew about it. Disgruntled exec went looking elsewhere Late in 2013, BlackBerry went through tough times, and a new CEO was appointed. Marineau- Mes was told his role might end up being narrower in scope than originally thought. Marineau- Mes wasn't pleased with this de- velopment and began talks with Apple. In December 2013, Apple of- fered him a vice-president posi- tion involved with developing operating system software. On Dec. 23, Marineau-Mes gave BlackBerry his notice of resignation in writing. He said he would probably join Apple in about two months. But BlackBerry told him he was bound to his contract, which required him to be available for a six-month notice period. Marineau-Mes challenged the contract, arguing it wasn't en- forceable because his original in- tended role as an executive vice- president changed, which quali- fi ed as a "good reason" to end the contract. He also said the contract vio- lated the Ontario Employment Standards Act because employ- ees are entitled to accrue vaca- tion during both active and inac- tive periods of employment, the six-month notice was an unen- forceable non-compete covenant and it was unfair for BlackBerry to try to prevent him from join- ing Apple. e court disagreed with Mar- ineau-Mes' claim the contract's vacation terms were contrary to the Employment Standards Act. Marineau-Mes argued the date of termination was the last day of service — which for him was Jan. 6, 2014, well before the end of the notice period — but the court found the date of termina- tion would be the end of the no- tice period. And, in fact, BlackBerry con- tinued to pay Marineau-Mes his salary and vacation pay after his last date of work. e fact that he wasn't called to active service wasn't surprising due to the dis- pute, said the court. Even if the contract allowed for the failure to provide vacation pay until the end of the notice period, only that provision would be null and void — not the entire con- tract, found the court. Marineau-Mes did get pro- moted to the position of execu- tive vice-president, as he received a pay increase and the promotion was confi rmed by the BlackBerry board, said the court. Even when the company went through tough times, Marineau-Mes contin- ued to play an important role in discussions for the company's di- rection, it said. e fact he was told the scope of his role might not be quite what was originally planned didn't change the fact he was already an executive vice-president. Such conversations would not consti- tute a "good reason" for resigning, said the court. In addition, it wasn't surprising Marineau-Mes' role changed af- ter he announced his resignation, it said. Notice period reasonable As for the six-month notice period, the court found it was reasonable for BlackBerry to ask Marineau-Mes to be available to perform duties for that amount of time, given the importance of his position. e notice period was not equivalent to a non-compete covenant because Marineau-Mes was still being paid during the no- tice period, said the court. "I do not think that requiring Marineau-Mes to assist with his transition out of the company, rather than performing his usual duties as senior vice-president, constitutes a material and det- rimental alteration within the meaning of the contract." e court declared the contract between BlackBerry and Mari- neau-Mes was binding and he was obligated to provide six months' written notice — meaning his ser- vices should be available to Black- Berry and he would continue to be paid until June 23, 2014. For more information see: • BlackBerry Ltd. v. Marineau- Mes, 2014 CarswellOnt 3522 (Ont. S.C.J.). Jeff rey R. Smith is the editor of Ca- nadian Employment Law Today, a publication that looks at workplace law from a business perspective. He can be reached at jeffrey.r.smith@ thomsonreuters.com or visit www. employmentlawtoday.com for more information. 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