Employee said he wasn't expecting offer when he signed the agreement
A British Columbia company must honour a settlement agreement with a dismissed employee, even though the employee found another job hours after signing it, the B.C. Supreme Court has ruled.
Keith Burnett was an employee of Rexel Canada Electrical, a distributor of electrical products in the Vancouver area. After 20 years with Rexel, he was dismissed and offered six months’ pay in lieu of notice. However, Burnett rejected the severance offer and Rexel paid him the statutory minimum of eight weeks.
Burnett filed a claim for wrongful dismissal and Rexel made a settlement offer for a lump sum of $80,000 on top of what he had already received, bringing his total severance amount to $90,181.32. To receive the money, Burnett had to sign a declaration that he had been “diligently searching for alternative employment,” had not received an offer of employment and had no current expectations of receiving an offer.
On Nov. 26, 2008, Burnett accepted the offer and signed it on the assurance he would receive the payment within 14 days. A few hours later, Burnett received an offer of employment from a company with whom he had interviewed a couple of months earlier. He didn’t tell his lawyer, who had been negotiating the settlement, and accepted the offer the next day.
Two weeks later, Rexel found out Burnett had found employment and informed his lawyer he had breached the settlement agreement, not only by failing to disclose he had been offered a job, but also by failing to diligently search for work because he didn’t prepare a resumé and spoke to only one company. Rexel refused to pay the settlement money and Burnett sought the court’s help in enforcing the agreement.
The court found at the time Burnett signed the agreement, the declaration was true. Even though he received a job offer shortly after he agreed to the settlement, he had last spoken with his new employer a month earlier and was not optimistic about the possibility of a job offer. The court also agreed Burnett’s job search methods were appropriate for the industry, which operated on word-of-mouth — which was how he got the new job.
“The state of affairs that existed at the time the statement was made no longer existed when the statutory declaration was given to counsel for (Rexel), but that does not make the declaration false. The declaration was a snapshot of (Burnett’s) employment status at the time he signed it. It did not purport to be a continuing representation for an unspecified time,” the court said.
The court noted Rexel could have protected itself by giving Burnett working notice or a schedule of payments that would stop if he found work, but it made the offer to avoid a looming trial date. Though the timing of Burnett’s job offer was unfortunate for Rexel, it was bound to the agreement once he signed. See Burnett v. Rexel Canada Electrical Inc., 2009 CarswellBC 584 (B.C. S.C.).