The National Hockey League’s decision to terminate referee Dean Warren in 2008 has cost the League thousands of dollars in litigation costs so far. Thanks to a ruling last week by Ontario’s Divisional Court, there are more costs to come, and the possibility of a finding that the NHL broke the law.
Here is the decision. It is called Warren v. OLRB.
I have discussed the Warren case in the past (here). In brief, he was fired for
‘substandard performance’. Warren argued in an unfair labour complaint that he was really fired for being active in the officials’ union. The Labour Board disagreed. This latest litigation relates to what happened after his unfair labour practice complaint was dismissed. In particular, the NHL denied Warren’s claim for severance pay because he had filed the original unfair labour practice complaint.
Some background. The Collective Agreement between the NHL and the refs union includes an unusual clause that offers severance pay to terminated employees, but not if the employee brings any sort of legal action against the employer. Here is the language in Section 13 of the Collective Agreement:
In the event a released…official pursues legal action against the NHL in connection with the release …of his employment with the NHL outside of or in addition to pursuing the remedies or procedures provided for in this agreement, such official shall remain entitled to his rights under law, but he shall be deemed to have waived his right to receive any of the benefits provided for in this Agreement, including without limitation the benefits provided for in sections 14 and 17.
Section 14 grants officials an entitlement to severance pay if they sign a release.
Warren was sent the release in 2008 after he was terminated but he did not sign it. Instead he filed an unfair labour practice at the OLRB alleging he was unlawfully terminated for union activity. He eventually lost that case, including a judicial review of the OLRB’s decision. Once his avenues of appeal of the OLRB decision had been exhausted, in 2013, Warren signed the release and requested his severance pay.
The NHL refused payment and argued that by filing the OLRB unfair labour practice complaint, Warren had forfeited his severance pay by operation of Section 13 of the Agreement.
In response, Warren filed another unfair labour practice complaint, this one asserting that the employer had unlawfully refused to pay severance because Warren had filed the OLRB complaint.
Warren’s complaint is that a refusal to award severance pay due to the employee’s filing of an unfair labour practice complaint amounts to unlawful discrimination for exercising legal rights under the Labour Relations Act (section 70, 72, 76, and/or 87). That seems like a pretty good argument. Those sections prohibit employers from punishing employees who attempt to exercise their rights under the Act, including by filing unfair labour practices.
Insofar as a collective agreement term so punishes an employee for filing an OLRB complaint, that clause would be legally suspect. The NHL argued that the situation is clearly dealt with by Article 13 of the Collective Agreement and Warren waived his right to severance by filing the OLRB complaint.
The employer also argued that Warren’s complaint should be dismissed for delay. That argument was based on the premise that Warren must have known back in 2008 when he filed his original ULP complaint that by doing so, he was forfeiting his right to severance because of Article 13. Therefore, the legal issue ‘crystallized’ in 2008 and he should not be able to wait five years to file a complaint. Warren argued that the issue didn’t crystallize until the NHL denied the severance, in 2013.
Surprisingly, to me at least, the OLRB bought the NHL argument that the case should be dismissed for delay. The OLRB did not deal with the merits of the case–i.e. whether the refusal to pay severance to an employee who files an OLRB complaint alleging a breach of the OLRA is itself a violation of the OLRA.
Warren sought judicial review of that ruling, and last week the court ruled in his favour.
The Divisional Court ruled that the OLRB was unreasonable in finding that Warren knew or ought to have known that by filing an OLRA complaint he was forfeiting his right to severance. According to the Court, Warren “is surely entitled to assume that the [NHL] would act in accordance with the law” and therefore that it would not refuse the severance payment if doing so was a violation of the OLRA. Since there was real legal question of whether a refusal to pay severance in response to an OLRA complaint is illegal, Warren could not reasonably have anticipated in 2008 that the employer’s intention was refuse payment of the severance.
Therefore, the Court rules that the legal issue had not crystallized in 2008 and that therefore the case should not have been dismissed based on delay. It ordered the case back to the OLRB for a decision on its merits.
That could be bad news for the NHL. The severance payment is over $300,ooo.
Issue for Discussion
Most employment related statutes include no-reprisal sections that protect employees from reprisals by the employer if they attempt to exercise their statutory rights.
Do you think a clause in an employment contract or collective agreement that denies a benefit, such as severance pay, to an employee who files a complaint under a protective employment statute is a violation of these no-reprisal provisions?
Should they be?