Nothing less than termination would restore client confidence: judge

Weisenberger v. Marsh Canada Limited (2003), 2003 CarswellMan 539, 2004 MBQB 14 (Man. Q.B.)

Paul Weisenberger worked for almost nine years for insurance broker Johnson & Higgins Ltd. (now Marsh Canada Limited)until he was dismissed in May 1992. In his dealings with clients, Weisenberger regularly added a fee on top of the premium quoted by the Toronto office, with the client never knowing and the extra income going to the local branch.

An elaborate false invoice scheme was used in the scheme, which contravenes s. 113(1)(g) of The Insurance Act. The court heard it was a practice encouraged by Ian Alexander, the manager of the local branch. The practice was eventually detected, and J&H reimbursed its clients $3.7 million for extra billings, some of it by Weisenberger. He was suspended on May 19 and his employment terminated a week later. A number of other employees were implicated in similar practices but they no longer worked for the company.

Weisenberger sued for wrongful dismissal, seeking general, aggravated and punitive damages. He claimed he didn’t know what he was doing was wrong; that he believed it to be standard procedure in all major brokerage firms; that he was only doing what his supervisor told him to do; and that he was scapegoated so J&H would avoid disciplinary action by the supervisory authorities.

In rejecting Weisenberger’s claim, Justice Hanssen of the Court of Queen’s Bench of Manitoba found J&H had just cause to dismiss him. His conduct had been “fundamentally incompatible with his duty,” wrote Hanssen, adding it “simply defies belief” that he didn’t know what he was doing was wrong.

J&H, not Alexander, was Weisenberger’s employer, the justice ruled, and it was clear Weisenberger knew head office would not have condoned the practice had it known about it.

That he was following directions given by Alexander did not justify his conduct, reiterated Hanssen. “An employee’s participation in a dishonest scheme constitutes just cause for dismissal despite the fact the employee participated in the scheme on the directions of his immediate supervisor and despite the fact that the employee derived no personal benefit from his participation in the scheme.”

The justice also found there was no evidence J&H had engaged in bad-faith conduct or had unfair dealing with Weisenberger in the course of his dismissal. The company had dealt with a number of outstanding financial issues (a Winter Club membership, his expense account, a salary adjustment for the time between suspension and termination and his Canada Savings Bonds) in a businesslike and courteous manner.

The conduct of the CEO who eventually fired Weisenberger was “highly commendable,” added the court. “He acted promptly, decisively, appropriately and responsibly. Weisenberger’s dismissal was necessary to restore clients’ confidence in J&H. Nothing less would have sufficed.”

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