B.C. manager fired for sexual relationship with subordinate

Manager lied about relationship to superiors; work environment like ‘elementary school’

A store manager in British Columbia was fired after having sexual relationships with subordinates and lying about it when confronted by management, a decision upheld by the B.C. Supreme Court.

Michael Carroll was the branch manager at an Emco outlet in Abbotsford, B.C. Emco is in the business of selling plumbing and heating parts and supplies. Seven workers at the store reported directly to him. In 2005, he earned a base salary of $48,000 and received a bonus of $30,000.

Carroll was a valued employee. When he took over as branch manager in 1999, the store was operating at a loss. In 2004 it had a profit of $200,000.

He was good friends with Barbara Randall, one of his subordinates. When they first met, both were married. However, both marriages resulted in separation. In the summer of 2002, they began a sexual relationship that continued until February 2005. Throughout the entire relationship, Carroll was Randall’s direct supervisor. Carroll deliberately concealed the relationship from his employer and repeatedly lied to his supervisors about it.

As Randall’s supervisor, Carroll was responsible for conducting her performance reviews and determining her raises. In 2003 and 2004 he gave her the highest raise in the branch. He even promoted her.

Some problems began to surface with Randall in 2004. In mid-2004, Carroll phoned Shirley Boissonnault, an HR manager at Emco, expressing concern over Randall’s attendance as she had been absent for seven out of eight days. Boissonnault thought that was out of character for Randall and asked Carroll if something was going on in her life that was causing a problem. Carroll said Randall was suffering from stress from her marriage breakup. Boissonnault said she then asked Carroll if there was anybody else involved and he said no.

“He deliberately lied to her,” the court said. “This was prejudicial to Emco’s interests as it deprived the company of an opportunity to remedy a problem which was producing poor work performance in one of its employees.”

But their relationship outside of work wasn’t going entirely unnoticed. Carroll and Randall frequently went out to lunch together. One worker, who didn’t report to Carroll, asked him if the relationship was sexual. He said Carroll replied with: “Absolutely not.”

By February 2005 Sean Kelly, a regional vice-president and Carroll’s immediate supervisor, had heard rumours about the relationship. Kelly was concerned about a conflict of interest in a situation where a branch manager was sexually involved with a subordinate. If that were the case, the company would act to avoid the conflict by having someone independent conduct performance reviews and other supervisory functions.

He approached Carroll and told him he had heard rumblings of a relationship. Carroll denied it. The relationship between Carroll and Randall ended in February 2005. In March, Carroll interviewed Tammy Robertson for a position running a new showroom at the Abbotsford store. Robertson and Carroll had worked together before and were close.

This was not lost on Randall, who shortly after asked Carroll, “So when does the hussy start?”

Robertson started working at the store on Feb. 28, 2005. On May 20, Carroll and Robertson went out for a bottle of wine and spent the night together. The next morning, they were seen by an Emco employee having breakfast. They agreed that having a relationship was a mistake and stopped.

But the atmosphere at work was beyond repair. An incident occurred between Randall and Carroll in his office. Randall alleged he had forcefully restrained her by putting his hand on the door and had threatened and harassed her. Carroll said Randall was so emotional that he held the doorknob until she calmed down because customers were outside.

An office administrator testified that the atmosphere at work was, “horrible… so much tension … I just wanted to get on with my job … was very hard to do because of drama all day.”

Carroll himself admitted the situation at work was out of control. One of the employees suggested to Carroll that he should call Dave Cox, a member of senior management responsible for coaching. On June 6, Carroll and Cox spoke over the telephone, discussing the tension at work. The next day Cox phoned him back and confronted him about the relationship with Randall. Carroll denied it. There was some disagreement over what exactly was said and denied, but the end result was that a member of senior management explicitly asked about the relationship and Carroll lied.

Shortly after that Kelly, Carroll’s supervisor, asked him directly if it was true that he and Randall had a relationship. Carroll said yes. But by this time the relationship much common knowledge at the store because of all the problems and tension.

“He was not truthful with his employer until compelled to be by the fact the truth was then known,” the court said. Kelly gave careful consideration to the matter. He went to the store and interviewed employees. He was told the branch was “not a tolerable place to work,” that “leadership was lacking — a soap opera,” and that it was like “elementary school.”

Emco decided to transfer the three people involved out of the Abbotsford store. Randall was offered a position in the Chilliwack branch, which she took. Robertson was offered a position in Vancouver, which she declined. Carroll was offered a position as a project manager in the head office in Coquitlam at the same base salary and benefits, but with no people under his supervision and less opportunity to earn a bonus.

Kelly said the company could no longer trust Carroll to supervise other employees and was concerned with his deception and conflict of interest. In a letter dated June 30, his employment as branch manager was terminated and he was offered the alternate position.

Carroll responded by e-mail stating he would not accept the other position and he was prepared to continue as branch manager in Abbotsford. Kelly phoned him and told him this was unacceptable and his employment with Emco would be over as of about July 7. Carroll filed a wrongful dismissal suit.

The court sided with the employer.

“I find that Mike Carroll, while the branch manager of the Abbotsford branch, for personal reasons that put him in conflict with the interests of his employer, deliberately and deceitfully failed to reveal his three-year relationship with Barbara Randall, his subordinate,” the court said.

It pointed out he conducted performance reviews, gave her raises, conducted disciplinary proceedings and promoted her without telling his employer about the situation so it could take measures to avoid the obvious conflict of interest.

When specifically asked by HR in the fall of 2004 about the relationship, Carroll chose to lie and deprived the company of an opportunity to take appropriate action, the court said. He lied when a worker who didn’t report to him asked him directly about the relationship. He lied when asked by his supervisor in February 2005.

“Mr. Carroll lied, again seriously prejudicing the company’s opportunity to take appropriate action, and he lied again to Dave Cox when he called about the horrific office situation with Barbara Randall,” said the court. “This instance was particularly egregious as it gave the impression Barbara Randall had serious inexplicable behaviour problems when Mr. Carroll very well knew the cause. Mr. Carroll was not truthful to his employer until he admitted the truth to Sean Kelly shortly after he knew the truth was already known from other sources.”

The court said the basic issue in this case was whether the behaviour was sufficiently egregious to violate or undermine the obligations and faith inherent in the employment relationship.

“No company could reasonably be expected to renew its faith in a person empowered with the significant responsibilities of a branch manager when that employee has so deliberately and repeatedly deceived it to its significant prejudice over such an extended period of time.”

For more information see:

Carroll v. Emco Corp., 2006 CarswellBC 1350 (B.C. S.C.)

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