Insults, insubordinate behaviour gave just cause to terminate executive's contract before its end date: Court
An Ontario company had just cause to terminate a fixed-term employment contract due to the employee’s insubordination and poor performance, the Ontario Superior Court of Justice has ruled.
K. Matthew Hoang was hired on a fixed-term contract of employment beginning Oct. 4, 2010, to be the chief financial officer (CFO) for Mann Engineering, a consulting, engineering and construction company in Toronto. The contract had a termination date of Oct. 30, 2011, and Hoang’s duties involved managing administration, sales and finance staff, overseeing Mann Engineering’s financial activities and budgets, strategic tax planning, and negotiating contracts for solar development projects — projects involving programs where agricultural barns were built for farmers in return for the lease of the barn roofs for solar panels.
Hoang’s contract also included a termination provision which stipulated it could be terminated at any time for cause by written notice and he would have no claim outside of what was required by the Ontario Employment Standards Act, 2000.
In early 2011, Hoang felt Mann Engineering was a “dysfunctional company” and its owner, James Mann, was unethical and untrustworthy. He testified he received a better employment offer in April 2011, but rather than taking it he decided to try to renegotiate his contract with Mann Engineering.
Contract renegotiated
James Mann felt there were some issues with Hoang’s job performance — such as an inability to do IT support and oversight — for which he had tried to coach Hoang and help him improve, but he agreed to make changes to Hoang’s contract. An amended letter of employment was prepared on April 21, 2011, which changed Hoang’s duties so they focused on sales management for solar projects and core business activities such as management of the company’s finances and tax planning. He was also to develop the company’s solar business and would receive commissions on the sale of a large solar project for which a letter of intent had been concluded as well as future solar projects.
The new agreement had a termination provision for “reasons other than criminal activity, sexual/human rights abuse or competition” with Mann Engineering’s business.
Hoang testified he signed and returned the new contract to Mann’s office while Mann was on vacation, but left it on Mann’s desk. However, Mann claimed he didn’t receive the contract and it wasn’t in Hoang’s employment file. The office manager didn’t see it on the desk while she was covering for the vacation at the time Hoang claimed to have returned it.
However, there continued to be issues with Hoang’s performance, including losing an agreement for distribution rights that came about due to a failure to follow Mann’s instructions, as well as rude and unprofessional conduct with staff, salespeople and clients.
One independent contractor reported that Hoang swore at him, refused to accept an older version of a memorandum of understanding (MOU) from a “touchy client” for submission to the government, and told him to get out of his office. Mann took over the MOU and submitted it and it wasn’t rejected. The contractor decided he wouldn’t deal with Hoang any further.
Mann Engineering’s vice-president of management interacted with Hoang daily and also found he could be abusive and unprofessional towards others. During the MOU situation, Hoang sent an email that said her actions were idiotic, to which she took offense. She also decided not to work with Hoang any further.
Employee treated co-workers and customers poorly
After a series of emails in which Hoang demonstrated resistance to follow instructions and an attitude that showed inappropriate behaviour that could be detrimental to the company, Mann demanded Hoang apologize to his co-workers and mend the situation. Hoang replied by saying the co-workers he insulted were basically incompetent and he refused to apologize.
Shortly thereafter, Hoang was in negotiations involving the large solar project and sent an email to the client’s representative that was sarcastic and dismissive. Hoang denied this was inappropriate and described it as “negotiation strategy.”
Mann decided the employment relationship was irreparably damaged and on May 30, 2011, Hoang’s employment was terminated.
Hoang sued for wrongful dismissal and breach of contract, as well as sales commission on the large solar project for which he had obtained the letter of intent.
Hoang didn’t help his case in testimony, as the court found his manner to be “argumentative, defensive and dismissive” while Mann and others who testified for Mann Engineering to be “forthright, clear and concise.” Hoang also continued to insist on his version of certain things even when faced with evidence that contradicted him, such as the emails.
The court found the evidence supported Mann’s claim that there were issues with Hoang’s job performance during his short tenure with Mann Engineering, and he was coached on ways to improve. The coaching also served as notice the company had issues with his performance.
The court also found the emails and testimony of Mann Engineering employees showed Hoang “displayed an unprofessional, uncollegial, insolent attitude toward his co-workers and displayed toward them an attitude of superiority throughout his employment.” Since the company was a small one of about 20 employees that relied on a closely-knit team, this kind of conduct was particularly damaging, said the court.
The court agreed the tone and language of Hoang’s communications with the client were also inappropriate for business use and not how clients or customers should be treated. Hoang’s attempts at justification for both the internal and external communications showed he took no responsibility for doing anything wrong.
“It appears that (Hoang) was either willfully blind to the inappropriateness of it all or it simply seemed to wash over him,” said the court.
The court found Hoang demonstrated wilful and inappropriate misconduct in dealing with co-workers and clients, as well as insubordination and refusal to acknowledge or understand his conduct was unprofessional. This provided just cause for dismissal, said the court.
In addition, Hoang’s claim he left the signed amended employment contract on Mann’s desk couldn’t be proven, as nobody else saw it and it wasn’t in his employment file. This left the original employment contract and its termination provision in effect.
As for Hoang’s claim for a commission on the large solar project, the court disagreed with him, finding a letter of intent was not a final purchase agreement. There was nothing in the contract that indicated commission was to be paid upon the signing of a letter of intent.
The court dismissed all of Hoang’s claims for compensation for wrongful dismissal and commission.
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