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Are you a Just Cause expert? Take the quiz and find out.

Today, a just cause quiz. If you are not in a union, an employer does not need any reason to terminate your employment. If there is just cause, however, you don’t get any severance package. If there is not just cause for your termination, you do.
 
Just cause is generally defined as behaviour so serious that it fundamentally breaches the terms of your employment, whether they are written down or not.
 
Obviously, stealing from your employer or assaulting another employee is just cause. Other than those easy situations, things tend to get grey. Barbara’s story will explain what I mean.
 
  1. Barbara has worked as a stylist in a large city for 18 years. Before she ever started the job she had renovated her basement to create a hair salon where she used to see clients. She gave that up when she got the job at the salon.
 
18 years later, her oldest child is off to university and as a single mother, her income from the salon will not cover the costs. She cleans up her disused basement shop and starts accepting private clients in her off hours. Her home is in the suburbs, not very close to the downtown salon. She doesn’t advertise. It’s all word of mouth. She never tells her salon clients that she’s doing work from home. Barbara never tells her employer what she is doing.
 
Is there just cause for Barbara’s termination without pay in lieu of notice if through happenstance the employer learns of Barbara’s moonlighting?
 
  1. Let’s imagine that two months after her starting her moonlighting Barbara realizes that what she’s doing might get her in trouble with her boss. She immediately confesses and offers to shut down her after-hour activities if that’s what the boss wants. She apologizes for not having told her employer about it in the first place. Is there just cause for Barbara’s termination?
 
  1. Now imagine that before ever taking her first home client, Barbara tells the employer what she’s doing, says she believes that none of the clients she sees at home would ever consider traveling as far as the salon for her services and promises she will never discuss her home shop with any of the salon clients. Her boss tells her that if she goes ahead and provides styling services from home she will be terminated without notice. Barbara points out that the boss did not specifically make it a condition of the offer of employment in the first place that Barbara not do any styling work from home. The issue was not discussed. If Barbara goes ahead with that first client, is there just cause for her termination?
 
 
ANSWERS
 
  1. A court would find there is just cause for Barbara’s termination. She has a fiduciary duty not to do anything that harms the business interests of her employer. Her loyalty should be to the salon. If there are people who would like to use her services, it is her responsibility to try to persuade them to come to the salon. The employer was loyal to Barbara for 18 years and helped her build up her clientele, reputation, and experience. Barbara is using those assets to compete with her employer.
 
  1. Maybe yes, maybe no. She realized the error of her ways and disclosed the activity and offered to stop. Arguably she breached the trust her employer should be able to have in her by not disclosing the moonlighting before it even began. She made a choice not to mention it earlier. However, would a reasonable person say she had irreparably damaged her boss’ trust in her? Doesn’t 18 years of loyal service give you the right to a second chance? This fact situation could go either way.
 
  1. There would be just cause. The obligation not to compete with your employer is one implied at law. It is established by a couple of hundred of years of court decisions. It’s a given. Employers are not required to make it clear in any offer of employment, whether verbal or written, that the employee can’t compete against the business that’s going to write their pay cheques. If Barbara’s house is close enough for her to get to work every day who is to say it’s too far for all of her salon clients? Her boss will appropriately be concerned that Barbara’s promise not to tell her salon clients about her home shop will disappear if the employment relationship ever ends through termination or resignation.
 
Ed Canning practices labour and employment law with Ross & McBride LLP, in Hamilton, representing both employers and employees. You can email him at ecanning@rossmcbride.com.
 
Ed Canning
Ed Canning
P: 905.572.5809
ecanning@rossmcbride.com