6-month notice of resignation upheld for BlackBerry executive keen to join Apple

Ontario court agreed contract provision was reasonable to allow for transition of important position
By Jeffrey R. Smith
|Canadian HR Reporter|Last Updated: 05/20/2014

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 Software 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 offered another promotion to executive 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 confirming the promotion and a contract. After his lawyer reviewed it, Marineau-Mes signed the contract on Oct. 16.

The employment contract included a provision that stated Marineau-Mes could resign from his position “at any time upon providing six months’ prior written notice.”

The 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 expenses.” His benefits would stop on the date of termination.

Finally, the contract specified that termination “for good reason” would not be considered a voluntary resignation. “Good reason” was defined as a “material 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 office more than 50 km from its current location.

BlackBerry didn’t announce Marineau-Mes’ promotion because 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 development and began talks with Apple.

In December 2013, Apple offered him a vice-president position 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 enforceable because his original intended role as an executive vice-president changed, which qualified as a “good reason” to end the contract.

He also said the contract violated the Ontario Employment Standards Act because employees are entitled to accrue vacation during both active and inactive periods of employment, the six-month notice was an unenforceable non-compete covenant and it was unfair for BlackBerry to try to prevent him from joining Apple.

The court disagreed with Marineau-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 termination would be the end of the notice period.

And, in fact, BlackBerry continued to pay Marineau-Mes his salary and vacation pay after his last date of work. The fact that he wasn’t called to active service wasn’t surprising due to the dispute, 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 contract, found the court.

Marineau-Mes did get promoted to the position of executive vice-president, as he received a pay increase and the promotion was confirmed by the BlackBerry board, said the court. Even when the company went through tough times, Marineau-Mes continued to play an important role in discussions for the company’s direction, it said.

The 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 constitute a “good reason” for resigning, said the court.

In addition, it wasn’t surprising Marineau-Mes’ role changed after 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. The notice period was not equivalent to a non-compete covenant because Marineau-Mes was still being paid during the notice 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 detrimental alteration within the meaning of the contract.”

The court declared the contract between BlackBerry and Marineau-Mes was binding and he was obligated to provide six months’ written notice — meaning his services should be available to BlackBerry 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.).

Jeffrey R. Smith is the editor of Canadian 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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