Canadian Employment Law Today

Canadian Employment Law Today | 7 Canadian HR Reporter, a Thomson Reuters business 2014 Cases and Trends District manager demoted after affair with company owner ends Owner claimed employee wasn't doing her job well and requested a change, but evidence showed employee wanted to stay in her position By JEffREy R. SMiTh A BriTish COluMBiA employer wrong- fully dismissed an employee who rejected a demotion following personal issues between the employee and the owner, the B.C. Su- preme Court has ruled. Faranak Shirbigi, 40, was hired as an as- sistant manager by JM Food Services, a franchisor of FreshSlice pizza shops in B.C., in 2009. She quickly moved up to the position of manager and, in January 2010, she was awarded a corporate position of district manager with responsibility for 16 FreshSlice stores throughout the B.C. lower mainland region. e district manager position required a three-year commitment, so Shirbigi signed a three-year contract that required her to oversee the 16 assigned store locations, along with set salaries and bonuses set out for each year of the contract. e contract had a provision stipulating Shirbigi must provide at least one month's notice before leaving, or else her salary would be calcu- lated at minimum wage for one month be- fore departure. Personal relationship followed promotion e owner and CEO of FreshSlice, Ray Russell, invited Shirbigi to a celebratory brunch. However, Shribigi claimed they stayed at her apartment and had sex, launching an affair that lasted several months. Russell was married and his wife was also a FreshSlice employee who was on maternity leave at the time. In February 2010, Shirbigi moved into an apartment unit Russell owned and lived there rent-free. ey also went on a trip to Niagara Falls together in May. When they returned, Russell's wife became suspicious. Shirbigi sent her an email reassuring her that she wasn't interested in her husband – which Shirbigi claimed she sent at Rus- sell's request. On another occasion, Shirbigi stayed at an apartment with Russell when both were on a trip to Toronto. Shirbigi had her first job performance evaluation in June and she received an overall grade of "C," though no training to improve her performance was offered. Russell claimed at one point he told Shirbi- gi she needed to "step it up," but no dead- line was set and Shirbigi wasn't told her job was in danger. In July, Shirbigi moved out of Russell's apartment, though their affair continued for a while longer. After Shirbigi started her tenure as a district manager, the FreshSlice brand expanded rapidly, resulting in seven new stores assigned to her area. By fall 2010, the extra costs associated with travelling to the additional locations were starting to catch up with Shirbigi and she expressed her opinion to management that her in- come would be higher as a store manager because of the decreased travelling costs that would be involved. However, she maintained that she was proud to be a dis- trict manager and she understood Russell would try to address her concerns, includ- ing a request to issue her year-end bonus early to offset her travel costs. eir sexual affair ended in September when Russell stopped visiting Shirbigi. In February 2011, FreshSlice hired three new district managers and Shirbigi was told by the corporate office manager that she was being removed from her position once they were fully trained — a training Shirbigi was assigned to do. Shirbigi was shocked and upset and had some discus- sions on possibly becoming a franchi- see trainer and overseer of opening new stores. However, she felt she would be em- barrassed to take a job with less responsi- bility within the company. Russell testified that he believed Shirbigi wasn't handling the district manager posi- tion and, in a private meeting in February, she expressed a desire to move back to a store manager position. He agreed she wasn't ready yet for the job. Russell emailed Shirbigi in late February to tell her not to worry and he could give her another position with less responsibil- ity. However, after Shirbigi trained the new district managers, she emailed Russell to convey her disappointment and sadness at the prospect of losing her district manager position. She said she wanted to "keep any personal issues out of it." Despite her efforts, Shirbigi was as- signed to a FreshSlice store in Surry, B.C., owned by Russell's brother. Shirbigi didn't want to work at this store because it wasn't successful and Russell's brother was diffi- cult to work with. She felt she was being set up to fail and Russell didn't want her near the corporate office when his wife returned from maternity leave. Shirbigi said she felt "horrible, worthless, used, humiliated, embarrassed and angry." She filed a suit for wrongful dismissal. Dispute over whether employee asked for demotion Russell denied having a sexual affair with Shirbigi, claiming they were only friends and he was just being generous when he of- fered her the apartment rent-free. He also claimed Shirbigi asked to stay at his two- bedroom unit in Toronto while she visited family at the same time he happened to be there, and the Niagara Falls trip was simi- lar to other trips he had taken with other employees. Russell also argued Shirbigi she had requested a move to a store manager position and later declined it. e court found there was no direct evidence supporting Russell's claim that Shirbigi requested a move to the position of store manager and out of the district manager position. Russell said she made the request in a private meeting and no- one else was aware of her intention. Con- versely, the email exchanges between them didn't seem to support this claim: Shirbigi emailed Russell to indicate her disappoint- ment at losing her position and Russell didn't show any surprise at this develop- ment. In addition, when the corporate of- fice manager told Shirbigi of the company's plans regarding the new district managers taking over, she recorded that Shirbigi was upset and relayed that to Russell, who still no clause on page 9 » The employee emailed the owner to convey her disappointment and sadness at the prospect of losing her district manager position. She said she wanted to 'keep any personal issues out of it.'

• Cover