Car dealership surprised successful sales manager with dismissal — then accused him of stealing a car when he tried to set up a business
Making a bad situation worse
Employers can’t get out of giving a dismissed employee reasonable notice — or, more likely, paying the employee in lieu of notice. Paying the statutory minimum for a prominent and successful employee isn’t going to cut it, regardless of whether the employer is aware of common law reasonable notice obligations.
But how can an employer make things even worse for itself? How about not being upfront with the employee about the reason for dismissal, trying to find just cause after the employee files a wrongful dismissal suit and concocting false allegations of theft that hurt the former employee’s attempts to start up his own business? That could result in a situation with a $90,000 payout to someone who was an employee for less than two years.
A Saskatchewan car dealership must pay nearly $90,000 to a short-term employee for wrongful dismissal that it exacerbated by spreading false rumours about his reason for dismissal afterwards.
Sergio Coppola, 47, was hired as a fleet account manager by Capital Pontiac Buick Cadillac GMC in Regina in August 2000. At the time of his hire, he had nine years of experience in car sales as well as several years of experience self-employed in his own businesses. Capital Pontiac’s president and CEO, Bruce Axelson, told Coppola the dealership needed more staff because of increasing sales.
Coppola did very well in his position, receiving recognition from the General Motors Fleet Managers Club in his first year. He continued to increase his sales, so Capital Pontiac gave him a new compensation plan that took more sales into consideration and also gave him responsibility for financing while another employee was on leave. He also received an annual volume performance bonus and the use of a demonstrator vehicle with dealer plates.
In addition to more sales, Coppola improved the financing portfolio, which led to his promotion to finance manager in July 2001. Even with the increased responsibility, his sales remained higher than other fleet account managers.
On June 28, 2002, about 22 months after Coppola was hired, Axelson came into Coppola’s office and presented Coppola with a written notice that stated Coppola was being laid off effective July 12. Axelson explained that he was reorganizing the dealership and he was eliminating a finance manager position. When Coppola asked why it was he who was being let go, Axelson replied that he was basing it on service time and the other two finance managers had been with Capital Pontiac longer. Axelson also took into consideration that Coppola had declined an offer to be a team leader at another dealership he owned, though he didn’t reveal this to Coppola. He also claimed he didn’t discuss Coppola’s dismissal with any other Capital Pontiac employees except payroll. Coppola was given payment for two weeks of notice and use of the demonstrator vehicle for another three weeks.
After he was let go from Capital Pontiac, Coppola found work at another dealership to handle a department to sell vehicles to people with low credit ratings, but that project fizzled after one month and his employment there ended.
Former employer’s allegation of theft complicated new business venture
Coppola decided to partner with an accountant to set up a mortgage brokerage firm. However, not long after their plan was set into motion, in October 2002, Coppola’s partner was told by one of the sales staff at Capital Pontiac that Coppola had been fired because one of the dealership’s vehicles had gone missing. It was hinted that Coppola had stolen a customer’s trade-in vehicle, but in reality the trade-in had no value and Coppola disposed of the car as a favour to the customer.
The accusation caused Coppola’s partner to hesitate in pursuing the partnership as it called into question the character and reputation of someone with whom he was planning on jumping into a risky business venture. Coppola was surprised when he learned of the allegation and the start of the business was delayed a few months while the partner checked things out. Ultimately, he opted to continue with the venture, but their application for a mortgage brokerage licence was delayed by Capital Pontiac’s allegations and Coppola claimed a credit union that was a major customer of Capital Pontiac refused to deal with him. Eventually, they received their licence in March 2003.
Coppola also experienced emotional distress when his former employer’s allegations came to light as he took pride in his work. He said he was emotionally devastated and it took a lot of time away from him that he could have devoted to setting up the new business. Coppola said he was stressed and lost a lot of sleep as he didn’t know how widespread knowledge of the false allegations was. He sued Capital Pontiac for wrongful dismissal and claimed extra damages for the dealership’s bad faith in spreading false allegations following the dismissal.
The Saskatchewan Court of Queen’s Bench found Coppola was terminated without cause and without reasonable notice, agreeing with the wrongful dismissal claim. Though Axelson claimed he was unaware the two-week notice requirement under the Saskatchewan Labour Standards Acts was only a minimum and an employee in Coppola’s position should be entitled to more notice, the court found this wasn’t an excuse.
The court considered the well-established Bardal factors that help determine the amount of reasonable notice. The character of Coppola’s employment involved a management position and his sales success resulted in a revised compensation plan that rewarded him well, said the court. Though his period of service was relatively short — just under two years — the court found he had risen quickly in prominence and had good reason to expect he would be employed with Capital Pontiac for a long time. The reason Axelson gave him for his dismissal “does not ring true,” said the court and it suspected the real reason for Coppola’s dismissal was his refusal to transfer to the other dealership as well as the fact he was making significantly more money because of his success under the new compensation plan.
“It may be the case that Mr. Axelson realized that he had been outwitted in compensation negotiations with Mr. Coppola who was now earning almost four times his initial salary,” said the court.
The court also found Coppola was at a relatively young age, but his extensive qualifications and status at Capital Pontiac made finding similar employment difficult. Ultimately, the court found six months was reasonable notice.
Employer’s conduct following dismissal ‘harsh and vindictive’: Court
The court also found reason for aggravated damages for the mental distress the resulted from the manner of Coppola’s dismissal. When Axelson dismissed Coppola on June 28, 2002, he had no information about any theft or fraud, nor was there any when Coppola’s business partner was told of the allegation. As it turned out, Axelson asked two employees to investigate whether there was just cause to dismiss Coppola after Coppola launched his wrongful dismissal suit in January 2003. This also contradicted Axelson’s claim he didn’t discuss Coppola’s dismissal with anyone outside of payroll and accounting, said the court. The resulting allegations in Capital Pontiac’s counterclaim caused further emotional distress for Coppola.
The court found Axelson did not contact the customer directly about the supposed theft of her trade-in vehicle and the customer actually indicated on a form that the car was worthless and Coppola had gotten rid of it for her. It would have been simple for Capital Pontiac to clear it up with the customer, but it did not, said the court.
Capital Pontiac’s failure to be honest with Coppola regarding the reason for his dismissal, the comments to his business partner and attempt to paint him as a thief following the dismissal amounted to a significant amount of bad faith conduct, said the court. This conduct resulted in emotional stress for Coppola and also hurt his attempts to start up a new business, effects that were “clearly forseeable and compensable,” said the court. In addition, Axelson never apologized for the false allegation of theft, even after withdrawing it later in the case in January 2004.
“Capital Pontiac not only failed to meet its obligations of good faith and fair dealing with Mr. Coppola, but indeed acted in a manner that was harsh and vindictive ostensibly because Mr. Coppola claimed to have been wrongfully dismissed — a claim which was well-founded in law,” said the court.
Capital Pontiac was ordered to pay Coppola six months’ salary in lieu of reasonable notice plus his vehicle benefit for the six months, which amounted to $68,034.74 after deductions for the two weeks’ notice already paid and the amount he earned in his month of employment with another dealership. It was also ordered to pay $20,000 in aggravated damages for its bad-faith conduct in the manner of dismissal and following the dismissal, for a total award of $88,034.74.
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