Employee fired for fishy letter to shareholders

Letter sent to shareholders and outsiders said management was 'disastrous'

A defamatory letter about a British Columbia company by one of its employees was sufficient grounds to fire him, the B.C. Supreme Court has ruled.

Yingyi Chen was a hatchery technician for Sable Fish Canada, a hatchery and fish farm on the B.C. coast. In late 2006, when Chen had been with Sable for about three years, he was promoted to production manager.

However, Sable wasn’t happy with Chen’s performance in the new role. It soon became apparent Chen didn’t have the people management skills or the administrative ability to be an effective manager. Sable management tried to help him improve and other employees also tried to give him assistance, but by late 2007 he had not only failed to improve but had gotten worse. After Chen came back from a one-month vacation in January 2008, he seemed to be going through the motions and Sable felt he was putting its business at risk by not being engaged in his job. Chen was soon removed from his position and given another job.

Unfortunately, the change in responsibilities did nothing for Chen’s performance. His productivity continued to wane and he seemed to get more depressed. Sable reprimanded him more than once for poor performance.

In the spring of 2008, Sable was experiencing financial difficulties. It decided to dismiss five employees to cut costs and try to raise funds through a share offering to existing shareholders.

On May 6, 2008, the day the employees were fired, Chen — who was still employed with Sable and held shares in the company — sent a letter to 40 people, including shareholders, that attacked the company and its management. The letter accused Sable of unfairly demoting him and replacing him with someone who wasn’t qualified and incompetent, going so far as to say an employee was almost killed under the new production manager’s instruction. Chen implicated there was strife among the staff and people were looking to get out and concluded the “management of the company is disastrous.” He warned the shareholders their money was being wasted and Sable was being mismanaged towards failure.

When Sable management learned about the letter the day after it was sent out, it decided to fire him. It also learned Chen had removed documents and items that were Sable property from the workplace, including confidential emails and the payroll records of a Sable employee.

The court found Chen’s letter made statements that were “exaggerated, disrespectful and inflammatory” without any regard to who would receive it. He also went over the head of his supervisor and the Sable president, who had no inkling of what he was doing. This misconduct and lack of consideration for the company’s interests were serious enough to warrant dismissal, the court found.

“Mr. Chen’s letter was clearly an attempt, in part, to embarrass both management and the board of directors to the shareholders,” said the court.

The court also found Chen’s comments in the letter could be considered defamatory, but as someone with an interest in communicating his concerns to other shareholders as a shareholder himself, he had a “qualified privilege” that allowed him a certain degree of leeway in making those types of statements. See Chen v. Sable Fish Canada Inc., 2010 CarswellBC 799 (B.C. S.C.).

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