Not meeting president, continuing daily meetings is not insubordination

F1 Software v. Broadview Software Inc., 2004 CarswellOnt 625 (Ont. S.C.J.)

Richard Underwood, through his company F1, was contracted to provide management services for Broadview Software Inc. There was no formal job description, and Underwood reported to the president and vice-president. Both sides agreed a key component of Underwood’s contract was that in his dealings with Broadview’s key software developer he was to treat him “with kid gloves.”

The team at Broadview was a small one, eventually growing to five developers and the company heads, and Underwood instituted daily status meetings as part of his management style. By early summer 2002 it was clear there were disagreements between the parties about management processes and style. The president directed Underwood to cancel the daily meetings.

Underwood greatly believed in structured daily meetings that reviewed the status and progress of the work, but most of the developers thought them unproductive. In fall 2002 Underwood instituted daily 10:30 a.m. meetings for developers. Some of them attended regularly and found them helpful, but others referred to them as “unlawful” or “secret” meetings and felt uncomfortable going to them as they knew the meetings had been cancelled.

All this came to a head on Nov. 21, 2002, during an angry meeting when Underwood was told to cease the morning meetings. After the meeting he was asked to get a status update from the key software developer. Instead Underwood asked the developer if he had complained about the daily meetings, and made a comment that implied Broadview may lose a major contract. Both of these suggestions were greatly upsetting to the developer.

The president interrupted the conversation and asked Underwood for the status update. When he didn’t receive an answer he asked what was being discussed and asked the developer to leave the room. He asked Underwood to wait for him in his office, but an angry Underwood refused. The president took this as insubordination and insolence and shortly thereafter Underwood was terminated.

The primary issue for the court was to determine if Underwood repudiated the contract by his conduct, or if Broadview terminated it. If the latter, was it with or without just cause?

Justice Karakatsanis of the Ontario Superior Court of Justice held Underwood’s conduct did not constitute insubordination. While he had not always handled things in the best way, he had pursued his duties in a manner not inappropriate to his responsibilities. The morning meetings were sufficiently different in nature to the prohibited meetings — they were brief, optional and held over coffee or tea break. These differences addressed the main objections to them, ruled the court.

Underwood’s failure to obtain written pre-approval for these meetings did not constitute insubordination, it added. While the president and vice-president were justified in being concerned, Underwood should have been given the opportunity to explain the differences between the meetings.

As for the key program developer, the court ruled Underwood did not mistreat, berate or abuse him in any way, that Underwood had worked around his sensitivities for over a year and there appears to have been no lasting harm from the Nov. 21 blowup. The president’s treatment of Underwood was a contributing factor to the tension of that morning and the company did not appear to suffer any lasting harm from the programmer’s inability to work for the rest of that day.

Underwood may have committed several errors of judgment, but they did not justify summary dismissal, the court reiterated. It awarded Underwood $15,858 for the balance of the contract plus unpaid vacation.

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