Cohen-Scali v. Linkeo.com inc.

Executive Summary: Key Legal and Evidentiary Issues

• Characterization of the relationship between Thierry Cohen-Scali and Linkeo.com Inc. as an employment contract under arts. 2085 et seq. C.c.Q. despite his role as shareholder and president.
• Determination of whether a disguised dismissal (congédiement déguisé) occurred when the employer unilaterally imposed a choice between no pay or an 80% salary reduction.
• Assessment of the existence and scope of a legal subordination link (subordination juridique) between Cohen-Scali and Ludovic Jaffres/the Linkeo group.
• Evaluation of which entities within the corporate group (Linkeo Canada and Linkeo U.S.A.) could be treated as “employers” for remuneration and notice purposes.
• Calculation of a reasonable notice period (délai de congé) and inclusion of salary, bonus and vacation pay within the compensable package.
• Review of whether Cohen-Scali reasonably mitigated his damages after termination, including through entrepreneurial activities rather than rapid re-employment.

Facts and background of the dispute

Thierry Cohen-Scali was at the heart of the creation and development of Linkeo.com Inc. (Linkeo Canada), a Montréal-based digital marketing and web solutions company serving small businesses. He incorporated Linkeo Canada in November 2010 through his holding corporation, 7708149 Canada Inc., together with Linkeo.com S.A. (Linkeo France), the French parent within the Linkeo group. From the outset, he was named president of Linkeo Canada, while the founder of the group, Ludovic Jaffres, was named vice-president. Over time, Linkeo France became the 69% majority shareholder of Linkeo Canada, and also wholly owned production entities in Mauritius and controlled related entities in the United States (Linkeo U.S.A.) and Mexico.
Although the business was a start-up in its early years, and Cohen-Scali drew no salary from 2011 to the end of 2012, the parties’ conduct evolved into a classic executive employment relationship. After investors insisted that “tout travail mérite salaire”, he began receiving a salary in 2013 in his capacity as an employee. The parent company’s internal documentation repeatedly referred to him as an employee and “collaborateur”, and his superior was clearly identified as Jaffres, the group CEO and principal shareholder. He was issued T4 slips from Linkeo Canada and equivalent W2 forms from Linkeo U.S.A., and his compensation showed source deductions consistent with employment income.
In his role as president and CEO, Cohen-Scali managed Linkeo Canada’s strategic and operational affairs. He handled strategic planning and budgets, acted as the public and financial face of the company, oversaw supplier and landlord relations, supervised financial and tax compliance with external accountants, and negotiated leases and office build-outs in Montréal and Toronto. He also took the lead in launching Linkeo Mexico and advancing the development and consolidation of North American operations, including work related to Linkeo U.S.A. Throughout, he participated in weekly meetings with Jaffres, where he reported on activities and results.
His physical location shifted during the relationship—moving between Montréal, Toronto, California and ultimately Florida—but his core functions remained tied to Linkeo Canada and group operations. Even after his relocation to the United States, the evidence showed that a substantial portion of his time continued to be devoted to Linkeo Canada. Starting around 2019, for immigration and structuring reasons, part of his remuneration began to be paid through Linkeo U.S.A., with internal cross-charging between the two entities. Nevertheless, there was no formal termination of his Linkeo Canada employment, nor any clear line demarcating which tasks were performed exclusively for which company. The Court treated both companies as closely linked employers in practice.

Employment relationship and legal subordination

The central preliminary issue was whether Cohen-Scali was truly an “employee” of Linkeo Canada within the meaning of articles 2085 and following of the Civil Code of Québec, or instead an independent business partner or solely a corporate officer/shareholder. Quebec civil law distinguishes a contract of employment from a contract for services or a purely corporate role primarily through the existence of legal subordination: the employer’s power to direct, control and, where appropriate, sanction the worker’s performance.
The Court emphasized that a written employment contract is not required; it may arise tacitly from conduct. The three classic elements—work, remuneration and a link of subordination—were all present in this case. The fact that Cohen-Scali was a shareholder, had broad autonomy, and did not observe a punch-clock style attendance regime did not deprive him of employee status. Modern jurisprudence, especially for senior executives and professionals, accepts a broader, “realistic” notion of subordination, focusing on the employer’s power to set objectives, structure the role, evaluate performance and unilaterally reorganize functions.
Evidence from Linkeo France’s own documents was particularly telling. An “Entretien annuel” form dated 4 March 2021 identified Cohen-Scali as “collaborateur”, with the “fonction: Président” for the Canada and U.S. service, and expressly designated Jaffres as his “supérieur hiérarchique direct”. His salary and bonus structure—8,000 CAD and 8,000 USD per month plus an objective-based semi-annual bonus—was set and periodically confirmed by the parent’s financial director and by Jaffres. Annual performance reviews set specific objectives, such as opening Linkeo Mexico, increasing recurring monthly revenue, and identifying acquisition targets.
Crucially, Jaffres retained and exercised the power to reorganize the business and redefine Cohen-Scali’s role and compensation. He had the final word on Linkeo Canada’s budgets, unilaterally restructured the company in 2021, reallocated executive responsibilities, and in 2022 decided to significantly downgrade Cohen-Scali’s remuneration and operational involvement. Instructions to suspend his pay as of 28 February 2023 were issued by Jaffres via the group’s finance director, again demonstrating central control. On this factual record, the Court concluded that Cohen-Scali was highly integrated into the group and clearly subordinated—juridically if not day-to-day—to Jaffres and the group’s governance.

Remuneration, multiple employers and contractual framework

Another complexity arose from the way compensation was shared between Linkeo Canada and Linkeo U.S.A. Initially, Linkeo Canada paid Cohen-Scali’s salary in full, even while he also served as president-CEO of the American subsidiary after its incorporation in 2013. With his planned move to the United States and need for a work visa, part of his remuneration began to be paid directly by Linkeo U.S.A., with internal recharges to Linkeo Canada. By 2022, his entire compensation of USD 200,000 plus a USD 36,000 bonus (on a potential USD 60,000 bonus) was being paid in U.S. dollars through Linkeo U.S.A., but 50% of that cost was still being billed back to Linkeo Canada.
Linkeo Canada argued that this structure broke or diluted the employment link, and that even if any notice or damages were owed, they should be calculated on only half the annual compensation (USD 118,000) supposedly borne by the Canadian entity. The Court rejected that analysis. Citing Quebec authority on employees working for related corporations, it held that where there is no clear demarcation between services rendered to each company, and where the entities share administration, business and personnel, both can be treated as employers for the purposes of employment law. Linkeo Canada and Linkeo U.S.A. functioned as a unitary employer in practice. The mere fact that part of the pay flowed through the U.S. company, for immigration and tax structuring reasons, did not change the fundamental legal relationship.
Thus, the Court found an unwritten contract of employment between Cohen-Scali and Linkeo Canada based on the full, global remuneration package. The plaintiff’s role, continuous service, and pay history from 2011–2022 all supported that conclusion. The corporate group could not reduce its obligations by fragmenting payroll administration across jurisdictions.

Constructive dismissal: unilateral and substantial change

Once the employment relationship with Linkeo Canada was established, the key question became whether Cohen-Scali had been constructively dismissed (congédié de façon déguisée). The Supreme Court in Farber and Potter frames constructive dismissal as occurring where the employer unilaterally and substantially alters an essential term of the contract (such as pay, duties or status), and the employee does not accept the change and effectively leaves. A formal termination letter is not required.
In this case, the turning point was an email sent by Jaffres on 10 November 2022. After noting that Linkeo was going through a “passe difficile” and had to reduce operating costs, he presented Cohen-Scali with two rigid “scénarios”: either stop all operational duties and receive no remuneration, or continue performing limited “support” tasks for the U.S. and Canada subsidiaries under supervision of functional departments, for USD 4,000 per month. Relative to the prior annual compensation of USD 200,000 plus bonus, this amounted to an 80% reduction in base salary, alongside a de facto demotion to a secondary, advisory-type support role.
Although the email superficially invited further discussion, the Court found that its language—“voici ma proposition”, “deux scenarios”, “soit tu…, soit tu…”, and “c’est ainsi que nous avons bâti le budget”—left no real room for negotiation. The budget for 2023 had already been built on the assumption that one of the two “choices” would prevail. A reasonable person in Cohen-Scali’s position would understand this as an imposed, non-negotiable restructuring of their role and pay.
Applying the Farber/Potter framework, the Court held that there was (1) a unilateral change by the employer, (2) a serious violation of an essential term (compensation and status), and (3) a change that a reasonable executive in his position would consider a substantial modification of the contract. The drastic salary reduction plainly prejudiced the employee. The employer’s subsequent instruction, confirmed in March 2023, to cease remuneration as of 28 February 2023 only reinforced the conclusion that Linkeo Canada had effectively terminated the contract without cause, dressed as a “choice” about future collaboration. That was sufficient to constitute constructive dismissal, regardless of the company’s financial difficulties or absence of bad faith.

Reasonable notice and mitigation of damages

Having found that Cohen-Scali was an employee who was constructively dismissed, the Court turned to the appropriate notice period (délai de congé) under article 2091 C.c.Q. That determination is highly fact-specific and considers the nature and importance of the position, length of service, age, circumstances of hiring and departure, and the difficulty of finding comparable employment.
At the time of dismissal, Cohen-Scali was 44 years old and had been effectively working full-time for Linkeo Canada since 2011, after several unpaid start-up years. He had founded the Canadian business, acted as its president-CEO throughout, and had accumulated 12 years of continuous service. His responsibilities were wide-ranging and high level: leadership of Linkeo Canada, significant roles in U.S. and Mexican affiliates, and a strong entrepreneurial and digital marketing specialization. His 2022 remuneration (USD 200,000 plus USD 36,000 in bonus) put him at the top of the company’s compensation scale, indicative of a senior, key position.
The Court accepted his testimony that, after the constructive dismissal, he was unable to find another role of comparable responsibility and pay in the digital marketing and entrepreneurial space. While Linkeo Canada argued that he failed to mitigate his damages and spent his time mainly on new business ventures (including developing an AI-based advertising platform under his own company Synepsis), the Court rejected the contention that he had to “remuer mer et monde” to secure a replacement job. The legal standard is reasonable efforts, not maximal efforts. An employee may discharge their duty to mitigate by diligently seeking work in the same or related field, and by attempting to generate income through their own start-up or consultancy when the market does not offer adequate opportunities.
The evidence showed that Cohen-Scali continued to pursue business projects, including creating Weberly.ai, a platform intended to automate digital advertising for local service businesses, which at the time of judgment had not yet generated revenue. The Court viewed this as consistent with a reasonable attempt to minimize loss, not an abandonment of the search for livelihood. Moreover, Linkeo Canada bore the burden of proving a failure to mitigate and did not demonstrate that he unreasonably rejected any concrete employment opportunity.
Balancing all these factors, the Court set the reasonable notice period at 15 months from 11 November 2022. This was shorter than the 24 months he sought but higher than the lower range urged by the defence, reflecting his relatively young age, long service, critical role, specialized skill set, and the difficulty of finding equivalent employment in a niche digital marketing and entrepreneurial leadership space.

Calculation of monetary entitlements and vacation pay

In calculating damages in lieu of notice, the Court accepted that the full 2022 compensation—USD 200,000 salary plus USD 36,000 bonus—formed the base for the notice-period award. Quebec law recognizes that bonuses form part of an employee’s overall remuneration where they are regular, performance-related and tied to employment. In this case, the bonus had been awarded regularly in at least 2021 and 2022, and was expressly framed as part of his pay structure in the employer’s own documents.
For 15 months of notice, the Court determined that the global amount owed for salary and bonus was USD 295,000. Since Cohen-Scali had already received USD 60,769.17 between 10 November 2022 and 28 February 2023, the unpaid balance was USD 234,230.83. Using an exchange rate of 1.3731 as of 26 May 2025, the Court converted this to CAD 321,622.35.
The Court then addressed vacation entitlements. Evidence showed, without contradiction, that employees of Linkeo Canada were entitled to four weeks (20 days) of paid vacation per year. For 2022, Cohen-Scali testified—again, unrefuted—that he had taken only three vacation days. On that basis, the Court awarded him the equivalent of 17 days’ salary, quantified at USD 13,076.91, which converted to CAD 17,955.91.
He also claimed vacation pay for the period of indemnified notice. Applying the same four-weeks-per-year practice to the 15-month notice period, the Court partially accepted his claim, awarding him 25 days of vacation (rather than the full two-year equivalent he had asserted). This translated to USD 19,230.75 (25 days at USD 769.23 per day), which converted to CAD 26,405.74.
These amounts were then aggregated to yield a total principal award in Canadian dollars. The Court rejected Linkeo Canada’s attempt to deny or significantly reduce the notice damages based on alleged non-mitigation and on the fact that the plaintiff launched a new business venture shortly after his dismissal. It noted that the employer could not “have the butter and the money for the butter” by simultaneously denying that entrepreneurship mitigated loss while using it to justify a reduction or denial of notice rights.

Final ruling and outcome

In the result, the Superior Court of Québec concluded that Thierry Cohen-Scali was, throughout the relevant period, an employee of Linkeo Canada under a contract of employment, notwithstanding his shareholder status, executive role, and partial remuneration through Linkeo U.S.A. The Court found that there was a real link of legal subordination to the group’s CEO, Ludovic Jaffres, and that the group’s documentation, payroll practices and managerial conduct all reflected a classic senior employment relationship. Linkeo Canada’s attempt to recast the relationship as a purely corporate partnership was rejected.
The Court further held that the November 2022 ultimatum—requiring Cohen-Scali either to stop all operational duties and forgo pay or to continue in a sharply downgraded support role at 20% of his previous salary—amounted to a unilateral and substantial modification of essential terms of his contract. Under the jurisprudence on constructive dismissal, that conduct constituted a disguised dismissal without serious cause. Given his age, 12 years of service, top-level position, and niche expertise, the Court fixed a reasonable notice period at 15 months and found that his efforts to mitigate, including through new entrepreneurial projects, were reasonable in the circumstances.
On the basis of the 2022 compensation package and the additional paid-vacation entitlements, the Court ordered Linkeo.com Inc. (Linkeo Canada) to pay Thierry Cohen-Scali a total of CAD 365,984, representing salary, bonus and vacation-related amounts, together with interest and the additional indemnity provided by article 1619 C.c.Q. from the date of service of the originating application, plus his judicial costs. In this way, Cohen-Scali emerged as the successful party, with the Court quantifying his monetary award at CAD 365,984 exclusive of interest and costs, whose precise dollar values were not separately fixed in the reasons.