Manager didn't disclose involvement in venture offering similar services to employer
A worker who knowingly breached his employer’s conflict-of-interest policy is not entitled to statutory notice or termination pay, the Ontario Labour Relations Board has ruled.
The worker was the manager of clinical operations for IQVIA Solutions Canada, a company that performs clinical trials and analytical services for pharmaceutical companies, hospitals, medical doctors, and other healthcare clients. He joined IQVIA in 2017.
The worker was considered a good, well-performing employee during his tenure with IQVIA, receiving positive performance reviews.
As part of his employment with IQVIA, the worker was required to sign a confidentiality and non-solicitation agreement. He was also trained on the company’s code of conduct – with regular refresher retraining. The code of conduct prohibited having “a financial interest in a job well or serve on the board of directors of an actual or potential customer, competitor, or vendor of IQVIA” or working in another job that provided services similar to IQVIA. Employees were required to disclose any potential conflicts of interest and encouraged to ask about any concerns over potential conflicts.
A separate conflict-of-interest policy contained similar requirements.
Worker involved in new startup company
In 2020, the worker became involved with a company called AGG Clinical Incorporated and didn’t disclose it to IQVIA. About two years later, IQVIA learned from one of its clients about the worker’s involvement with AGG.
IQVIA investigated and discovered a website that described AGG as offering clinical trail site management, clinical data management, research controls and agreements, and other services that IQVIA provided. The worker was listed as one of AGG’s directors, as was another IQVIA employee who was a subordinate of the worker.
IQVIA held a meeting with the worker on April 18, 2022, at which the worker was confronted with his involvement with AGG. The worker said that AGG had planned to offer services to clients different from IQVIA, although he acknowledged that they were in the healthcare sector and the services were similar to IQVIA.
The worker said that AGG had come to him for help because of his knowledge of clinical trials, but it was uncertain how it would provide its services and it was “not a full-blown company.” He claimed that he had never really worked for AGG and the company had no revenues. He helped “create the vision” for the company” but it never had any employees. AGG was “a dead company” with no operations, the worker said.
As for the other IQVIA employee, the worker said that he told her about the opportunity because she had potential. He acknowledged that he could see how it could be a conflict but he wasn’t sure if the venture would go anywhere and felt that it was too early to bring anything to IQVIA’s attention.
No use of confidential information
The worker assured IQVIA that he didn’t use any confidential information for AGG and he didn’t spend any working time on AGG business. IQVIA was able to confirm that the worker didn’t send any of its confidential information to anyone for AGG use.
After the meeting, IQVIA decided to terminate the worker’s employment, along with that of the other employee, for violating its code of conduct and conflict-of-interest policy, exercising bad judgment, and breaking the trust necessary to continue in his position.
The worker filed an employment standards complaint for termination pay in lieu of notice, but an employment standards officer found that IQVIA terminated the worker for just cause and did not violate the Ontario Employment Standards Act, 2000 when it didn’t provide notice or termination pay.
The worker appealed the officer’s decision to the Ontario Labour Relations Board.
Disclosure of potential conflicts required
The board noted that IQVIA’s code of conduct and conflict-of-interest policy both explicitly stated that employees were required to disclose immediately actual and potential conflicts of interest. Since AGG intended to provide similar services as those offered by IQVIA to the same general healthcare market, there was at least the potential for a conflict of interest – and the worker acknowledge this to be the case, said the board.
The board also found that the worker further breached the code and policy by not seeking approval to become a director of AGG. Both required approval from IQVIA’s legal department before serving on a “for-profit entity’s board of directors.”
Another way the worker breached the code and policy was by failing to disclose his work for AGG. Even though it wasn’t during his working hours with IQVIA, employees were required to seek approval for any outside employment and such employment could not involve providing services similar to IQVIA, said the board.
It was clear that the worker understood the code and policy and he was aware that he was violating them, so this constituted intentional “disobedience” that was part of the threshold for not providing termination or severance pay under the ESA, said the board.
“I find that [the worker’s] conduct was deliberate and intentional,” said the board. “He knew that he was doing something wrong, in the sense of violating the code and the policy.”
The board found that the intentional nature of the worker’s conduct was further demonstrated when he used his managerial position to recruit another IQVIA employee to the venture.
Serious, intentional misconduct
The board determined that the worker decided to wait and see if AGG went anywhere instead of fulfilling his obligations under the code and policy. This was serious, intentional misconduct that was not trivial, the board said.
Although there was no evidence of any harm to IQVIA, the board noted that the company emphasized its code of conduct and ethical behaviour, due to the nature of its industry. In addition, the worker held a managerial position that required a significant amount of trust and in which he was expected to set an example, said the board.
The board also found that, although AGG didn’t move forward with any business, the company was incorporated with the worker and his subordinate appointed as directors while still employed by IQVIA, and the website was active and offering its services. This was a significant violation of the code and policies, the board said.
The board determined that the worker’s actions amounted to wilful misconduct and disobedience that met the threshold to deny him notice or termination pay under the ESA and its regulation. See Francisco Baraquio v. IQVIA Solutions Canada Inc., 2023 CanLII 126946.
