Man fired for dishonesty after lying about wife’s duties for competitor

Liu v. Tri-Star Seafood Supply Ltd., 2004 CarswellBC 1604 (B.C. S.C.)

Chung Sum Liu started as a junior shipping clerk when he joined Tri-Star Seafood Supply in 1994. He was later promoted and for almost six years, until September 2003, was an executive assistant to the vice-president of operations.

Liu’s wife also worked for Tri-Star but she left the company and eventually moved to another company which also did business in the seafood supply industry. The seafood supply industry is very competitive and seafood companies try to keep the identity of suppliers confidential for as long as possible.

On three occasions Tri-Star’s president, Claude Tchao, asked Liu what his wife’s duties were for the competitor company. He was told she was doing accounting and some administrative work. But her duties had expanded and she was involved in buying and selling. She also ran the business, under instructions, when the boss was away.

Prior to the third conversation about Liu’s wife’s duties, Tchao suspected Liu may be leaking information about Tri-Star’s suppliers to his wife. Tri-Star had experienced supply problems with several items and Tchao learned the competitor was receiving the problem items from a company that formerly supplied Tri-Star.

Tchao believed Liu had lied to him and sent him a letter of termination. The letter offered a salary continuance of four months if Liu agreed to a two-year non-competitive agreement. Liu did not accept the offer and filed for damages.

Liu claimed it was only after he was fired from Tri-Star that he found out his wife did more than accounting and administrative work and that they did not talk about their work when together. His wife testified similarly.

In deciding the case Justice Tysoe of the British Columbia Supreme Court noted that, as set out in McKinley v. BC Tel, whether an employer is justified in firing an employee on the grounds of dishonesty depends on whether the dishonesty led to a breakdown in the employment relationship.

In this case the issue was whether Liu willfully told a lie to his boss and, if so, was the lie of sufficient impact to warrant termination.

The court found Liu did willfully lie about his wife’s duties. It is unlikely a husband and wife would not talk about their respective jobs, said Justice Tysoe. That they both volunteered during testimony they were very busy at night taking care of their young son, and with other family matters, suggests there was collusion between them.

In addition, the wife had gone to two trade shows in Taiwan in 2001 and 2002 and it’s implausible, ruled the court, if Liu still thought her to be doing bookkeeping, that he’d not ask her why she was sent.

“Mr. Liu’s lie was not a minor or a trivial one,” said Justice Tysoe. “He lied to the president… about a conflict of interest involving a competitor.”

Liu knew the matter was important because he’d been asked about it twice before.“Mr. Liu breached the faith inherent in the work relationship and provided just cause for his dismissal by Tri-Star.”

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