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Does Sears Have a Policy of Falsely Alleging Cause for Dismissal?

by David Doorey March 29, 2011
written by David Doorey March 29, 2011

When I was a practicing lawyer, I had a bunch of cases in which employees had been cut off insurance benefits by an insurance company that alleges the employee no longer qualified, despite pretty clear medical evidence that they were still disabled within the meaning of the definition in the insurance policy.  I would send an angry lawyer’s letter and miraculously the claim would be reinstated. Of course, most people don’t go to a lawyer.  I have to admit that I became suspicious that insurance companies encourage adjusters to deny valid claims and then just wait and see if they challenge the decision.  I could never prove that (though there have been cases in which courts have found that insurers engaged in that type of conduct).
Now comes an interesting wrongful dismissal case against Sears Canada, called Covelli v. Sears Canada.  Several ex-Sears employees have filed suit and alleged that Sears has a policy of always alleging cause for dismissal, even when there clearly is not cause. The benefit of doing that would be that Sears would avoid having to pay contractual notice and other statutory benefits owed employees dismissed without cause, including severance pay under employment standards legislation.  True, an employee might challenge the allegation of cause, but many won’t, and for those that do, Sears could just settle the case by offering the money that should have been paid in the first place.
The reported case linked above is only a preliminary motion.  Sears asked the court to throw out the allegation about the policy of alleging cause.  Sears argued that how Sears may or may not have treated other employees over the years is not relevant to the present case, that if the argument were permitted to go forward, it would mean reviewing hundreds of old files to look for a pattern of false allegations, which would drag the case on for a long time, and that Sears would be prejudiced by the review of all these earlier dismissals.
The Court rejected Sears argument and allowed the claim of a policy of false cause allegations to go to trial.  The plaintiffs agreed to narrow their search parameter so that at most there were 200 other dismissal to consider, and probably less than that.  In addition, a policy of falsely alleging cause in order to avoid paying notice, termination pay, and severance pay, if proven, would clearly be relevant to the assessment of damages in a wrongful dismissal case.  The policy would be relevant to the employees’ request for damages for “bad faith in the manner of dismissal”  (remember the false allegation of cause in Wallace?)  as well as punitive damages.
So we will have to keep an eye on this case.  I’d be shocked if this case makes it trial, but you never know.
Have any of you readers ever come across an employer that makes false allegations of cause in order to avoid termination payments?

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David Doorey

Professor Doorey is an Associate Professor of Work Law and Industrial Relations at York University. He is Academic Director of Osgoode Hall Law School’s executive LLM Program in Labour and Employment Law and a Senior Research Associate at Harvard Law School’s Labor and Worklife Program. Professor Doorey is a graduate of Osgoode Hall Law School (LL.B., Ph.D), London School of Economics (LLM Labour Law), and the University of Toronto (B.A., M.I.R.).

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thelawofwork David J. Doorey🇨🇦 @TheLawofWork@mas.to @thelawofwork ·
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My fingers are just too big to play an A chord on the #guitar.

Otherwise I would be a rock star. This is the only thing holding me back.

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thelawofwork David J. Doorey🇨🇦 @TheLawofWork@mas.to @thelawofwork ·
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Not seen comparable stats for Canada.There are terminations, but also better laws in most Canadian jurisdictions, including

- remedial certification
- interim reinstatement
- card-check/quick votes

“1 in 5 workers in US is fired for organizing a union” https://onlabor.org/labor-law-reform-is-needed-for-unions-to-succeed/

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thelawofwork David J. Doorey🇨🇦 @TheLawofWork@mas.to @thelawofwork ·
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This is Canada's federal Minister of Labour.

Bill 377 was a labor bill disguised as a tax law (so Cons could pretend it was federal jurisdiction) that buried unions in red tape & reporting requirements not applicable to any other orgs.

https://www.parl.ca/Content/Bills/411/Private/C-377/C-377_3/C-377_3.PDF

Bill 525 ...

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Seamus O'Regan Jr @SeamusORegan

Bills 377 and 525 were two of the most anti-worker, union-bashing bills this country has ever seen - put forward by the Harper Conservatives.

We scrapped them. We believe in unions. We believe in workers.

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