Lawyer v. lawyer

Case shows even lawyers get into scraps over things like independent contractor status and wrongful dismissal

An Ontario lawyer was justified in firing an associate who sent her a stinging letter, an Ontario court has ruled.

Karen Cunningham operated a law firm in Mississauga, Ont. In the summer of 2002, she was looking for an associate lawyer to work in her office. She hired Dawn Bennett in July.

Bennett was to be paid 50 per cent of all fees billed and collected. She would receive advances on commission at the rate of $38,000 per year. She was responsible for the payment of standard employee deductions, her Law Society fees and liability insurance premiums.

During her first morning on the job, Cunningham presented Bennett with a written agreement specifying the terms of the position. The written agreement contained a number of provisions that had not been discussed during either the interview or the subsequent telephone conversation when Bennett accepted the position. She signed it.

Bennett immediately took over a large number of files, the bulk of which were family law cases, an area in which she had little experience. The office was very busy, and she put in long hours, often working weekends.

Bennett was concerned Cunningham was not giving her the tools to do her job properly. She was particularly concerned about a lack of office resources and the inadequacy of the technology.

Bennett met with Cunningham to address those concerns. In response, Cunningham invested $4,800 in a voice-mail system and purchased new software.

In November 2002, Bennett expressed concern that while her share of fees billed was about $26,500, only $2,650 had been collected. She was also concerned about whether all her time dockets had been entered. It turned out that 42.8 hours of her docketed time had not been entered into the computer.

The two met again on Dec. 16, 2002. Bennett remained concerned. The gap between fees billed and collected had increased. After five months, the advances paid to Bennett exceeded her share of fees collected by about $10,000. She asked Cunningham for a legal assistant, but Cunningham told her that, if she wanted one, she would have to bear the cost from her commission income.

Prior to this meeting, Bennett had pulled some accounts and discovered a number of instances where time she had docketed had been credited to Cunningham. When Cunningham learned of this, she reassured Bennett the errors would be corrected.

The two met once more on Dec. 21, jut prior to Cunningham leaving on Christmas vacation. Bennett gave Cunningham a four-page letter which documented nine areas of concern. She also sent her a copy by registered mail. In the letter, under the heading “docketing system,” Bennett accused her of being dishonest and negligent. The letter contained other comments suggesting Cunningham was disorganized and incompetent.

When Cunningham came back from her Christmas holiday, she terminated Bennett’s employment. Bennett’s last day of work was Jan. 10, 2003.

Independent contractor or employee?

The Ontario Superior Court of Justice had a number of issues to consider in this case. The first was whether or not Bennett was an employee or an independent contractor.

The employer took the position Bennett was an independent contractor. It pointed out she was paid commission and submitted an invoice every two weeks for professional services rendered. She was responsible for paying her own taxes and payroll deduction, and the intent from the start was that Bennett was an independent contractor.

But the court didn’t agree, pointing out Bennett was hired to work as an associate lawyer for an indefinite period of time. She devoted her work exclusively to Cunningham’s clients and wasn’t entitled to any vacation until after she had worked in the office for one year.

“Whether a person is an employee or an independent contractor is an issue that the court must determine based on the facts of each case,” said Justice G. Valin. “The fact that parties have agreed in writing that an individual is to be designated an independent contractor, rather than an employee, is not determinative of the issue.”

Did just cause exist?

Once the court had concluded Bennett was an employee, the next issue on the table was whether or not Cunningham had just cause to terminate her employment based on the letter.

The letter purported to address nine areas of concern she claimed to have previously expressed to Cunningham without results. Cunningham said she was shocked and angered by numerous false and insulting comments in the letter.

Justice Valin discussed the letter from Bennett in terms of insolence. In an employment relationship context, insolence has been described as derisive, contemptuous or abusive language or conduct directed by an employee at her employer, he said.

“Generally, two or more instances of insolence are required to justify summary dismissal,” said Justice Valin. “However, a single incident … will justify summary dismissal if the employer and employee are no longer capable of maintaining a working relationship.”

Bennett said she wrote the letter because she was frustrated by what she saw as a lack of response by Cunningham and because she was feeling anxious about the payment of fees to the Law Society and liability insurance premiums due at the end of the month. But she hadn’t discussed this anxiety with Cunningham, and she also admitted the language of the letter was harsh.

Cunningham simply did nothing to provoke Bennett to write the letter, the court said. She didn’t offer any reasonable explanation for writing the letter, nor did she seek to apologize. The court pointed out Cunningham didn’t return to the office until Jan. 6. That gave Bennett “ample opportunity to cool off and to offer an apology,” said Justice Valin.

Counsel for Bennett pointed out the letter ended with: “I would like to work together with you to resolve these issues. Kindly contact me so that we may work together to make this arrangement a successful one for both of us.” The letter was therefore courteous rather than insolent. But the court disagreed.

“The overall tone of the letter was anything but courteous,” said Justice Valin. “It was critical. It was accusatory. It was disrespectful. The letter suggested that Ms. Cunningham was disorganized, incompetent, dishonest and negligent.”

The fact a second copy of the letter was sent by registered mail also cast a “dark cloud over the sincerity of the closing words,” the court said.

It simply destroyed the working relationship and was cause for dismissal, said Justice Valin.

“The relationship between lawyers practicing in the same law office is fundamentally based on confidence, respect and trust,” said Justice Valin. “After she had an opportunity to read the letter in its entirety and to consider its implications, Ms. Cunningham concluded that she could no longer have a working relationship with Ms. Bennett. Her conclusion in that regard is justified.”

For more information see:

Bennett v. Cunningham, 2006 CarswellOnt 6909 (Ont. S.C.J.)

If Bennett had won…

Had the court found Bennett had been wrongfully dismissed, it would have awarded her four months’ pay in lieu of notice.

Bennett was called to the bar in 2001 and was 31 at the time of termination. She had been on the job for six months. She found another job shortly after being fired.

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