No bad faith in dismissal but employer’s attempt to cover up reasons ‘reprehensible’
The British Columbia Supreme Court has ordered a car dealership to pay a former apprentice mechanic more than $145,000 in wrongful dismissal and punitive damages after the dealership tried to cover up its reason for dismissing the young man.
Tyler Marchen, 26, had a father and older brother who were both auto mechanics and followed in their footsteps when he began work in the body shop at Dams Ford Lincoln Sales, a car dealership in Surrey, B.C., in the spring of 2002. His older brother, Anthony, also worked at the dealership.
Four-year apprenticeship agreement
Dams was happy with Marchen’s work and after several months the dealership offered him an apprenticeship. Marchen signed an apprenticeship agreement on Nov. 13, 2002, for a term of four years. Upon the successful completion of the apprenticeship, including in-school technical training and a specified number of hours of on-the-job training, Tyler would become an automobile repair journeyman.
In the summer of 2004, Marchen’s brother Anthony became a suspect in an investigation of stolen auto parts worth more than $30,000. Anthony admitted he had been stealing to support a drug habit but denied responsibility for all of the thefts. However, Anthony was arrested for breach of parole and possession of a stolen vehicle in November 2004 and Dams found out the stolen car had been repainted in its body shop.
Gordon Dams, the owner of the dealership, spoke to Marchen’s father about Anthony’s problems and Marchen’s name came up. His parents assured Dams Marchen was very different from his brother and he had nothing to do with his misconduct.
Fired after brother’s legal troubles
On Jan. 27, 2005, Marchen’s supervisors met with him at the end of his shift and informed him he was being dismissed. Marchen asked why but was told it was “not up for discussion.” He was given a Record of Employment (ROE) that indicated his reason for termination was dismissal and two weeks’ severance pay. One supervisor told him on the way out the decision had come “right from the top.”
The next day, Marchen’s father called Gordon Dams, who told him Marchen was fired because the criminal investigation had spread and both brothers could be charged. Dams management later told an employment insurance investigator Marchen had been dismissed “due to a police issue” and called back in June 2005 to say Marchen was dismissed because the dealership had downsized its body shop and there was no longer any work for him.
Marchen wrote to Dams on Feb. 14, 2006, demanding the balance owed under his fixed-term contract. Dams responded by sending him $2,434.29 it said the dealership had underpaid him over the course of his employment and indicated it was the “full and final settlement.”
The court found it was likely Marchen was terminated because of Dams’ suspicion he was involved in his brother’s criminal activity rather than downsizing. Had downsizing been the real reason, the court said, the ROE should have given a shortage of work as the reason for termination and there would be no reason why Dams couldn’t have told Marchen why he was terminated. In addition, the body shop was actually growing. Revenue had grown from 2003 to 2004, so downsizing would have likely involved a business case to justify it. However, Dams had nothing of the sort documented.
Dismissal breached apprenticeship contract
The court found Marchen was fired because Dams was afraid he was involved in his brother’s problems, despite the fact there was no reason to believe so. As a result, the court ruled Dams breached the apprenticeship contract and was on the hook for its remainder, equal to $18,751.73.
Though the reason for dismissal was mistaken and unjustified, the court found Dams didn’t act in bad faith in the manner of dismissal. Despite its motivation, the dealership carried out the actual dismissal respectfully and reasonably. Though it didn’t immediately inform Marchen of the reason for dismissal, it did advise his father the next day. The court ruled there were no damages in excess of normal distress that come with a dismissal.
However the breach of the contract was a different story. The court found it “has significantly set back Tyler’s career” by halting his apprenticeship. He was unable to find a new sponsor and as a result subjected to lower wages and uncertain future employment. The court ordered Dams to pay $25,000 in damages resulting from loss of training and status Marchen suffered from the wrongful termination of the contract and $2,036 in relocation expenses for his new job.
Attempt to cover up reason for dismissal unfair
While the court didn’t find bad faith in the way Dams handled Marchen’s dismissal, it found the dealership attempted to cover up the reason for dismissal to the court and the employment insurance investigator by coming up with the downsizing story after the fact. This breached its obligation to act fairly, particularly to a “young apprentice whom it wrongfully terminated from his first full-time job.” For this conduct after the termination, the court ordered Dams to pay $100,000 in punitive damages, bringing the total award to $145,187.73.
“Dams’ actions are reprehensible and a substantial departure from the conduct and practices reasonably to be expected from an employer such as (Dams),” the court said. “Dams’ conduct was planned and deliberate and intended to mislead the court…to keep Tyler from receiving damages to which he was entitled.”
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