Board of directors, new executive director of Saskatchewan facility believed business trip was for personal reasons, but previous director had approved it
A Saskatchewan employer must pay 24 and 20 months’ notice, respectively, to two employees it fired for charging expenses for a business trip the employer believed was for personal reasons, because the trip was authorized by the employees' supervisor and they had no reason to believe it wasn’t legitimate.
Brian Swidrovich, 62, was the director of business development for the main arena facility in Saskatoon, Sask., that was initially called Saskatchewan Place when it was constructed in 1988. William Antonishyn, 69, was the director of ticketing and business projects for the facility, which was run by the Saskatchewan Place Association (SPA), a non-profit corporation governed by up to 10 board members including Saskatoon’s mayor, city council members, and several members of the public. The SPA was focussed on managing the business and affairs of the facility, while the day-to-day operation was handled by an executive director and a management team that included Swidrovich and Antonishyn.
Swidrovich’s role as director of business development involved the marketing of building and event sponsorships and long-term bookings of the corporate suites in the arena. He had to develop and maintain professional relationships with other businesses and sponsors with an eye to increasing revenue and profit for the facility and the SPA through event creation. Swidrovich began employment with the SPA in 1994 as an event co-ordinator, and his job evolved over the years into the director of business development. He also gained the title of director of an air show the facility was involved in and was managing director of two sponsored events held there.
Antonishyn’s role as director of ticketing and business projects was to manage the facility’s box office functions, budgeting, accounting, ticketing, and management information systems. He was hired as controller when the facility opened in 1988 and worked his way up to the director of ticketing and business projects.
Each member of Saskatchewan Place’s management team was allowed an annual spending limit that didn’t require the executive director’s approval. The limit was $15,000 for Swidrovich and Antonishyn, while the executive director could spend up to $25,000 without special approval from the SPA. Part of these amounts were used for business trips designed to foster positive professional relationships with existing sponsors and recruit new ones. These trips were only occasionally reported to the SPA board if they fell within the spending limits, as the executive director was the main conduit to the board and such communication was only as deemed necessary.
Business trips with clients
In 2009, Swidrovich came up with the idea for business trips with clients as a way to develop business through sponsorships — the SPA had developed a plan to be more aggressive and proactive in developing relationships with new clients and socializing with existing clients. He and Antonishyn went on a business trip to Dallas, Tex., with clients that year. They took another trip in 2010, this time to Phoenix, Ari., that also had a purpose of gathering facility information for potential bids for Canadian Football League and National Hockey League franchises for Saskatoon. The executive director of Saskatchewan Place — at the time called the Credit Union Centre due to a sponsorship agreement —approved the trips. The management team of the facility believed that the networking associated with these trips had value and their cost was covered under the executive director’s discretionary spending limit.
In 2011, Swidrovich and Antonishyn planned another trip to Phoenix and the executive director was included, as he was planning his retirement and it would be the last business trip he would have. One of the clients organized most of the itinerary and took vacation time so he could go. Antonishyn almost didn’t go because he had a lot of work to do at the time, but the executive director encouraged him —but Antonishyn did stop in Edmonton to meet with a representative of one of SPA’s concession partners on the way. The executive director and Antonishyn were in Phoenix from Oct. 22 to 25, while Swidrovich and the client stayed until Oct. 28. As was normal practice for such trips, Swidrovich and Antonishyn used SPA credit cards to cover certain expenses and the statements were sent to SPA’s accountants.
During the 2011 trip, Antonishyn continued to work on his laptop computer to take care of certain matters, and when they went to a football game he made observations and notes of the stadium’s operational features.
The executive director officially retired at the end of October 2011 and a new executive director, Will Lofdahl, succeeded him.
Earlier in October, at a retirement party for the departing executive director, Swidrovich was discussing SPA business with a board member when he mentioned he would be away later in the month on a “boys’ trip” for the retiring director. The board member later told the board vice-chair about the remark and, concerned that SPA money was being used for a personal trip, they brought it to the attention of Lofdahl when he took over.
Swidrovich and Antonishyn submitted their expense reports from the trip for reimbursement, which totalled almost $8,000 including airfare, meals and drinks, golf fees, and football tickets. Lofdahl reported the expenses to the SPA board, adding that board members had told them taking the trip as a business expense would not be an appropriate use of SPA resources. Lofdahl based the latter point on the board member’s recount of his conversation with Swidrovich at the retirement party.
Employees surprised at investigation
Lofdahl interviewed Swidrovich and Antonishyn on Jan. 4, 2012, with the board chairperson present. The two men were told beforehand that they should be prepared to justify the legitimacy of the expenses connected to the 2011 trip to Phoenix. Both Swidrovich and Antonishyn were distressed over this development and made it clear the trip had been approved by the previous executive director. They both stated they believed the trip was justified and authorized, and Swidrovich denied being told expensing it was inappropriate. After the interviews, they were placed on administrative leave pending further investigation.
Antonishyn was sufficiently bothered that he sent a full description of the trip and its purposes to the board and personally delivered a resignation letter to the board chairperson. The chairperson told him the letter was premature, but believed the resignation was an “admission of guilt.”
The board chairperson spoke to the client who had gone on the trip, who specified that he had taken vacation time, reimbursed his own expenses, and said for him it wasn’t a business trip. The chairperson then spoke to the former executive director, who said he had supported the trip and there were legitimate reasons for it. He added there were no formal meetings or tours with facility operators, but it wasn’t a retirement trip for him and he didn’t believe it crossed any policy lines. After learning that Swidrovich and Antonishyn had been placed on administrative leave, the former executive director also wrote a letter to the city manager setting out his justification for the trip.
Lofdahl completed his investigation and wrote a recommendation to the board that the 2011 trip wasn’t a business trip but instead was a “celebration” of the previous executive director’s retirement. Lofdahl maintained Antonishyn had been warned about the board’s disapproval. However, he felt terminating both men would harm the facility’s operation, so he recommended they be informed that any future violation of SPA policies would be met with disciplinary action.
The board held a special meeting on Jan. 5, 2012, after reviewing Lofdahl’s report. The chairperson said that after the interviews, he didn’t believe that the former executive director had authorized the trip, as he still felt it was a personal trip. The board was also concerned about a lack of transparency in how the trip was planned and approved.
After discussing the matter with the board, Lofdahl changed his mind and decided to dismiss both Swidrovich and Antonishyn for dishonesty. Antonishyn was invited to either retire or resign, which he refused, so letters of termination were drawn up. The letters stated that the trip wasn’t a business trip and both men charged personal expenses to the SPA, contrary to SPA policy.
Lofdahl also contacted police, who proceeded with a fraud investigation but no charges were laid.
Swidrovich and Antonishyn filed a wrongful dismissal suit, claiming moral and punitive damages stemming from extra difficulty caused by media coverage of their terminations, which hurt their ability to find alternate employment.
The Saskatchewan Court of Queen’s Bench noted that the issue was not the validity of the reasons Swidrovich and Antonishyn believed the trip was legitimate, but whether they had proper authorization to take it. The court found that throughout the investigation and dismissal of the two employees, Lofdahl and the SPA board “ignored one central, salient and indisputable fact — namely, that (the employees’) immediate supervisor, authorized them to sponsor and participate in the 2011 trip.”
The court also found that the SPA board believed the trip was wrong and the two employees knew that it wasn’t acceptable conduct, as it wasn’t for a valid business purpose as required under its policy on reimbursement of business expenses. However, the identification of “business purpose” was a matter of opinion that differed between the board, Lofdahl, and the two employees, the court said.
The court noted that under the previous executive director, Swidrovich and Antonishyn had “relatively free hand in deciding how it would meet the SPA’s combined vision” to foster its business. Things may have changed when Lofdahl took over and wanted more transparency, but the trip in question was before his time.
“I find it questionable for (Lofdahl) to have retrospectively applied his own standards, as commendable as they may be, to practices that existed well before he arrived on the scene,” said the court, adding that there was no evidence the previous executive director breached any reporting obligations with regard to business trips.
The board also found that the fact the client took vacation time for the trip was irrelevant, as it was still possible to “do business or discuss business if the circumstance or so arises” with the client.
In addition, there was nothing indicating Swidrovich and Antonishyn should have been aware that the trips were inappropriate. All of them were approved with no indication the board challenged them at any time. There was no reason for them to think the 2011 trip was any less appropriate than the previous two trips, said the court.
Finally, the court also found the two employees were not told the board didn’t approve of the trip. Swidrovich’s conversation with the board member at the retirement party gave no indication of this, and Lofdahl’s understanding of it was incorrect. As a result, the board determined both employees were wrongfully dismissed.
The SPA was ordered to pay Swidrovich damages equal to 20 months’ pay and benefits and Antonishyn 24 months’ pay and benefits. The court denied any claim for moral or punitive damages as it found the employer’s approach to the matter, while “seriously flawed” and “poorly articulated,” didn’t amount to bad faith or reprehensible conduct.
For more information see:
• Swidrovich v. Saskatchewan Place Assn. Inc., 2019 CarswellSask 107 (Sask. Q.B.).
