Sobeys fired innocent worker for theft

What happens when an employee, dismissed for theft, is completely exonerated? Grocery giant Sobeys was faced with that dilemma after it fired an assistant store manager it was convinced stole thousands of dollars

What happens when an employee, dismissed for theft, is completely exonerated? Grocery giant Sobeys was faced with that dilemma after it fired an assistant store manager it was convinced stole thousands of dollars.

The obvious answer might be to reinstate the worker — something both Sobeys and the employee wanted and strived for in this case. But when Sobeys refused to acknowledge the dismissal had been without cause and attached conditions to the worker’s reinstatement, the worker balked. The case ended up before the Nova Scotia Court of Appeal, and Sobeys ultimately was ordered to reinstate the worker and pay him back wages.

The case

Rhyan Coleman started working for Sobeys in 1983. He was an assistant store manager at a Sobeys in Truro, N.S, when he was terminated.

On June 12, 2001, Sobeys fired Coleman because, after an investigation, it believed he had stolen $7,000. In the termination letter, Coleman’s supervisor said: “We are satisfied from all the information available to us that you took the money.”

In September 2001 Coleman was charged with theft by the Royal Canadian Mounted Police. But before the start of the criminal trial, another employee confessed and the charges against Coleman were dropped.

In September 2001 Coleman enrolled at the University of Maine. He graduated in 2002 with his bachelor of education. In March 2003 he received his Nova Scotia teaching license. He found some work as a teacher but apparently not in a full-time position. He still wanted to be reinstated to his old job at Sobeys.

Conditions attached to reinstatement

Coleman filed a complaint against Sobeys under Nova Scotia’s Labour Standards Code. Section 71(1) of the act, with some exceptions that don’t apply in this case, prohibits an employer from dismissing without cause an employee whose period of employment is 10 years or more. Coleman also sued Sobeys in a civil action.

In the spring of 2003, counsel for Coleman and Sobeys exchanged letters which discussed possible settlement of the labour standards complaint. Both sides were agreeable to reinstating the employment relationship.

Sobeys proposed a reinstatement date of April 22, 2003. Sobeys would not, however, acknowledge that Coleman’s dismissal had been without cause. Coleman wanted either acknowledgement from Sobeys, or to obtain a ruling under the Labour Standards Code, that his dismissal had been without cause.

Since Sobeys and Coleman could not agree on this, he did not report to work on April 22.

On April 30, Sobeys sent a written offer proposing Coleman be reinstated on May 5, 2003. The offer required Coleman to sign a reinstatement agreement which included a provision that said the reinstatement was “in full satisfaction of any right of reinstatement that Coleman has under the Labour Standards Code of Nova Scotia.”

Sobeys acknowledged this provision was meant to assist its submission to the labour standards director and tribunal that these bodies should decline to rule on whether Coleman had been dismissed without cause.

Coleman also declined this reinstatement offer. In his view, if Sobeys would not acknowledge it didn’t have cause to fire him then his pursuit of a ruling under the code shouldn’t be hindered by the conditions in the reinstatement agreement.

Sobeys stands by decision

Sobeys said that, at the time it fired Coleman, it was acting reasonably and in accordance with the code.

“At the time of dismissal, Sobeys had just cause to terminate Mr. Coleman’s employment without notice, or pay in lieu of notice, and such termination did not violate the (code),” the company’s counsel said in a letter to labour standards officer.

It said that since another employee confessed to the theft, it was abundantly clear Coleman was not responsible.

“This new information does not, however, detract from the decision that was made by Sobeys at the time of Mr. Coleman’s dismissal, nor weaken the legitimacy of that decision,” the letter said.

Sobeys pointed out that it conducted a thorough and complete investigation and that its conclusion Coleman took the money was reasonable and based on objective results of its investigation, including input from the RCMP.

Ruling in Coleman’s favour

On Sept. 4, 2003, the director of labour standards ordered Sobeys to pay Coleman $77,764.08 representing wages and benefits from the date of Coleman’s dismissal in June 2001 to April 22, 2003, when Sobeys offered reinstatement.

But the director declined to order reinstatement because Coleman had abandoned his claim for reinstatement when he did not return to work in April 2003. The director also declined to award Coleman pre-judgment interest, recovery of mitigation costs (in the form of educational expenses) or legal costs.

Coleman appealed the directors ruling to the labour standards tribunal. Before the tribunal, he claimed reinstatement, recovery of his educational expenses and pre-judgment interest.

In February 2005 the tribunal ordered Sobeys to reinstate and compensate Coleman for his lost wages and benefits to the date of reinstatement, less any employment income earned since his dismissal. The tribunal ordered Sobeys to pay pre-judgment interest on the award, but dismissed Coleman’s claim for recovery of educational expenses.

Sobeys appealed that ruling to the Nova Scotia Court of Appeal.

Sobeys argued Coleman had effectively abandoned his position when he refused the reinstatement offered to him. But the court disagreed. Coleman didn’t object to reinstatement — it was the terms under which Sobeys was reinstating him that prevented him from returning.

“Mr. Coleman had been dismissed for a theft he did not commit,” the court said. “He wanted Sobeys’ acknowledgment or a determination under the code that the dismissal had been without cause. Sobeys declined this acknowledgement.”

The court said the company’s proposal for reinstatement contained wording which arguably could prejudice Coleman’s ability to obtain a determination from the tribunal. He declined to jeopardize his protection under the code.

“This is neither an abandonment of his claim to reinstatement nor a repudiation of his employment contract,” the court said.

The court then turned its attention to the company’s next argument. Sobeys said reinstatement was not appropriate because Coleman had sued Sobeys civilly for various remedies, including aggravated and punitive damages related to wrongful dismissal.

By pursuing these claims, Sobeys said Coleman had clearly damaged the employment relationship and, as a result, the relationship was no longer viable and reinstatement was not appropriate.

But the court disagreed. It said Sobeys made repeated offers of reinstatement to Coleman after it knew of the lawsuits.

“Their disagreement was with collateral issues — whether the conditions of reinstatement would include either Sobeys’ acknowledgement that there had been no just cause or wording which arguably might prejudice Mr. Coleman’s ability to claim other remedies for wrongful dismissal,” the court said.

Civil suit didn’t kill reinstatement

It rejected the idea that a civil suit meant reinstatement was no longer a possibility.

“An employee who was wrongly fired is not barred from a statutory remedy of reinstatement merely because he also claims civil remedies,” the court said.

Sobeys also took the position that Coleman failed to mitigate his losses. By not accepting reinstatement in April 2003, Coleman failed to act reasonably and his compensation should cease on that date, the employer said.

The court disagreed. As stated before, Coleman had a legitimate concern that, if he accepted, the conditions on the reinstatement might prejudice the protection and other remedies available under the code.

“Mr. Coleman wore the scarlet letter of dismissal for theft,” the court said. “It is not unreasonable that he wanted to rehabilitate his reputation and claim any remedies to which he would be legally entitled. Sobeys refused to acknowledge that the dismissal had been without cause.”

Sobeys also argued Coleman failed to mitigate his damages because he went to school instead of looking for another job in the retail food industry, for which he had been trained by Sobeys.

Again, the court disagreed. It said Sobeys had not proven, beyond merely criticizing Coleman’s decision, that he acted unreasonably. The court said Sobeys had to prove he failed to make reasonable efforts to find other work and that, had he done so, he likely would have found replacement work.

The court said there was no evidence of another job that was available to Coleman that he declined or avoided.

“It is not surprising that an employee in a small community, branded as a thief in the cash-based retail industry, would have difficulty obtaining a similar job in that community,” the court said.

It is not unreasonable, in those circumstances, that he chose another path and went to university, the court said. Therefore the employer’s appeal was dismissed and the tribunal’s decision was upheld.

For more information see:

Coleman v. Sobeys Group Inc., 2005 CarswellNS 472 (N.S. C.A.)

Worker ‘devastated’ by accusation

Blaise MacDonald, an East Bay, N.S.-based labour lawyer, represented Rhyan Coleman in this case. He said the worker and his family were devastated by the accusations of theft, and Coleman opted to return to school because he thought he had no future in retail. MacDonald said Coleman was convinced he couldn’t get a job in a business dealing with cash, or any company for that matter.

“He never thought he was employable after the termination for theft, and so he remustered and he went to the University of Maine and took his education degree,” said MacDonald.

He said Sobeys has yet to apologize to Coleman for falsely accusing him of theft and can’t fathom why the company stuck to its guns on the issue other than “stubbornness.”

He offered the following advice to employers who dismiss a worker for theft only to later find out the worker was innocent:

“I would tell the employer to take somebody upper echelon and get in a car, with or without chauffeur depending on how well off that person is, drive down to that family’s house, knock on the door and tell them how terribly sorry they are and that they have their chequebook with them and that, as long as the number is reasonable, they’ll fill in the cheque,” he said.

MacDonald also said that a tentative settlement had been reached in the civil suit, but it had yet to be finalized at press time.

He said Coleman returned to work at Sobeys in July but left in September when he got a job offer from a school board for a term contract.

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