RBC justified in firing top broker who brought prostitute back to Calgary office after hours
An Alberta judge has thrown out a wrongful dismissal claim by a broker who brought a prostitute back to his office after hours and then left her on the premises alone, with access to confidential client and company information, following a dispute over money.
Jim Whitehouse worked for RBC Dominion Securities in Calgary. He was very successful, ranking in the top 200 nationally among RBC’s 1,500 investment advisors. In his last year with the company, he earned more than $450,000 in commission.
But all that came to an abrupt end. On Jan. 20, 2004, Whitehouse had been drinking heavily. He went looking for a prostitute and met a woman named Cassandra. At his suggestion, they took a taxi to his office in the Canada Trust tower downtown, arriving just before 10:30 p.m.
Whitehouse used his pass card to enter the building, and was filmed coming in with Cassandra by a camera in the lobby. They took the elevator up to the company’s office on the 16th floor and went to his office.
An argument ensued over payment of the fee, and nothing happened between the two. Whitehouse demanded that she leave, but she demanded payment of the balance of her fee before she left. Whitehouse had apparently given her $60, and she wanted the additional $140 of her $200 fee.
They returned to the lobby of RBC and Whitehouse left, leaving Cassandra behind. Whitehouse returned at about 10:49 p.m., which means she was alone for up to 19 minutes, the court said. She would have had easy access to any files or papers on the reception desk in that time or in the unlocked file cabinet behind it.
Message left on voice mail
Cassandra used the telephone to leave a message, recorded at 10:41 p.m., on another phone in the office. The message was:
“Hi. I don’t know what time it is at night, but I’m here in your RBC Investment offices, RBC Canadian Securities Incorporated. A man who works in your office named Bill brought me up here. I’m a hooker from 3rd Avenue and he picked me up in a taxi and brought me up here to do me in his office. He’s not paying me the rest of my money, so therefore he’s left me in your building at night. Your phones say night on them in here. I don’t know where he is. I don’t know how to get out. He’s left me up here in the office building. So I’m sure you’ll have many questions for me tomorrow. You can call me at (her phone number). My name is Cassandra. And I’m not joking about this.”
She also phoned a friend and a taxi, and left the building without seeing Whitehouse again. Whitehouse said he left to find a security guard to remove Cassandra from the office but couldn’t find anyone so he caught a taxi to go home. When he got a few blocks away, he changed his mind and went back.
News spreads quickly
The next day, news of his indiscretion spread quickly. Cassandra started calling the office and then showed up in person. An investigation by RBC was begun. The person who received the voicemail from Cassandra the night before reported it and a copy was made by the company. The records for pass cards were reviewed, and they revealed Whitehouse’s entry at 10:30 p.m. and again at 10:49 p.m. The security camera footage was viewed and it showed Whitehouse and Cassandra entering together.
Once Jason Baba, the branch manger, was made aware of what Whitehouse did, events started to move quickly. He reviewed the evidence and reported the incident to his superior in Edmonton, who in turn spoke to his superior in Toronto.
Meeting between broker, RBC
Baba then arranged a meeting with Whitehouse and his immediate supervisor first thing in the morning on Jan. 22. Baba twice asked Whitehouse if he brought a prostitute into the office on Jan. 20 and both times he denied it. Only after being told there was videotape evidence did Whitehouse confess.
Baba allegedly gave Whitehouse a chance to explain himself, but no explanation was offered. He was fired and asked to leave the premises. As he was leaving, Baba gave him Cassandra’s phone number and suggested he arrange to pay her. If she continued to visit the office, Whitehouse’s home phone number would be given to her, he said.
Whitehouse took this to be a threat, but the court said it was a “reasonable response” from Baba to ensure she would have no reason to visit the office.
RBC relied on two grounds for dismissal: Whitehouse’s conduct in bringing a prostitute to the office and his leaving her alone in the lobby area, privy to client and corporate documents.
Justice McMahon of the Alberta Court of Queen’s Bench said the case was unique, and fell outside of the usual problems that justify dismissal such as: conflict of interest, breach of duty or fidelity, wilful disobedience, fraud or dishonesty, intoxication, serious incompetence or sexual harassment.
“(Whitehouse’s) conduct here cannot easily be described in any of these terms,” said Justice McMahon. “Other cases justify summary dismissal with the more general description of serious misconduct and revelation of character. Serious misconduct is not easily defined. It depends very much on the nature of the employment and the consequences of the act on the employer. Revelation of character relates to conduct which indicates character that is incompatible with continued employment — generally dishonesty or untrustworthiness.”
In ruling RBC had just cause to fire Whitehouse, Justice McMahon considered:
•the nature of an investment advisor’s duties, the employer’s expectations and the employment relationship;
•the nature and seriousness of Whitehouse’s conduct; and
•the impact of that conduct upon the business and reputation of the employer.
Whitehouse chose his employer’s offices as a place to take Cassandra. He had to know the building was being monitored. Interestingly, Whitehouse admitted that this wasn’t the first time he had brought a prostitute back to the office after hours.
“That conduct does more than simply reveal his then character,” said Justice McMahon. “It exhibited a contempt for his employer, his co-workers and their respective reputations in the business community. It shows a serious lack of judgment.”
He made the problem worse by abandoning her on the premises with access to information.
“That was a reckless disregard for his clients’ interests,” the court said. “The risk to client and corporate confidentiality was significant.”
The fact she didn’t take advantage of it was irrelevant — the fact he gave her the opportunity was serious enough.
When given a chance to come clean to his supervisors at the Jan. 22 meeting, he lied about it.
“Had there been no tape or entry logs, the inference from his answers is that he would have denied it all,” said Justice McMahon. “This was not a single testosterone-driven mistake by a 25-year-old. This man was 49. He was married with a young family. He was responsible for $125 million of client capital.
“He was a vice-president of the largest brokerage house in Canada. With his wealth and privileges came responsibilities which he clearly had difficulty recognizing. This is not to say that misconduct in the upper realms of the business world is unheard of, but from there the fall is further and the injury greater. The conduct of senior employees can become the acceptable norm for all employees. Thus an employer is justified in requiring strict compliance with its code of conduct by those who purport to lead.”
A ‘pattern of conduct’
The court said Whitehouse argued that he was severely intoxicated at the time and under stress at home and work. But the court wasn’t sympathetic.
“This was a pattern of conduct, not an isolated event,” said Justice McMahon. “It cannot be so easily excused. His dishonest answers to his manager were made when he was sober and at work and when he should have realized the significance of his actions.”
While one can empathize with a plea by Whitehouse that he needed help to combat his alcoholism and his high-risk lifestyle, he never sought help, at least from his employer, until he was confronted and fired, the court said.
There was no evidence of damage to the company’s reputation, but the court said tolerance of his conduct would impact the employer’s relationship with other employees and could seriously infect the working relationship at the office.
“It was important for management to restore order quickly and to redefine clearly the permissible limits on employee conduct,” said Justice McMahon. “Any lesser response would undermine the confidence of both employees and clients in the competence of management.”
For more information see:
• Whitehouse v. RBC Dominion Securities Inc., 2006 CarswellAlta 706 (Alta. Q.B.)
RBC countersuit dismissed
RBC Dominion Securities filed a countersuit against Whitehouse for defamation and for damages to its reputation.
But the court dismissed the counterclaim. It said there was no evidence of specific damage to the business or reputation. Some clients followed Whitehouse to his new employer, but that could happen under any circumstances. The news did travel fast through the industry, but RBC is a leader in its industry and it’s doubtful the news had much impact.
“In fact, it is likely that any risk of such damage was removed by the employer’s immediate dismissal of the employee,” said Justice McMahon. “The firmness of the employer’s response may in fact have enhanced its reputation for demanding good conduct from its employees.”
Jim Whitehouse worked for RBC Dominion Securities in Calgary. He was very successful, ranking in the top 200 nationally among RBC’s 1,500 investment advisors. In his last year with the company, he earned more than $450,000 in commission.
But all that came to an abrupt end. On Jan. 20, 2004, Whitehouse had been drinking heavily. He went looking for a prostitute and met a woman named Cassandra. At his suggestion, they took a taxi to his office in the Canada Trust tower downtown, arriving just before 10:30 p.m.
Whitehouse used his pass card to enter the building, and was filmed coming in with Cassandra by a camera in the lobby. They took the elevator up to the company’s office on the 16th floor and went to his office.
An argument ensued over payment of the fee, and nothing happened between the two. Whitehouse demanded that she leave, but she demanded payment of the balance of her fee before she left. Whitehouse had apparently given her $60, and she wanted the additional $140 of her $200 fee.
They returned to the lobby of RBC and Whitehouse left, leaving Cassandra behind. Whitehouse returned at about 10:49 p.m., which means she was alone for up to 19 minutes, the court said. She would have had easy access to any files or papers on the reception desk in that time or in the unlocked file cabinet behind it.
Message left on voice mail
Cassandra used the telephone to leave a message, recorded at 10:41 p.m., on another phone in the office. The message was:
“Hi. I don’t know what time it is at night, but I’m here in your RBC Investment offices, RBC Canadian Securities Incorporated. A man who works in your office named Bill brought me up here. I’m a hooker from 3rd Avenue and he picked me up in a taxi and brought me up here to do me in his office. He’s not paying me the rest of my money, so therefore he’s left me in your building at night. Your phones say night on them in here. I don’t know where he is. I don’t know how to get out. He’s left me up here in the office building. So I’m sure you’ll have many questions for me tomorrow. You can call me at (her phone number). My name is Cassandra. And I’m not joking about this.”
She also phoned a friend and a taxi, and left the building without seeing Whitehouse again. Whitehouse said he left to find a security guard to remove Cassandra from the office but couldn’t find anyone so he caught a taxi to go home. When he got a few blocks away, he changed his mind and went back.
News spreads quickly
The next day, news of his indiscretion spread quickly. Cassandra started calling the office and then showed up in person. An investigation by RBC was begun. The person who received the voicemail from Cassandra the night before reported it and a copy was made by the company. The records for pass cards were reviewed, and they revealed Whitehouse’s entry at 10:30 p.m. and again at 10:49 p.m. The security camera footage was viewed and it showed Whitehouse and Cassandra entering together.
Once Jason Baba, the branch manger, was made aware of what Whitehouse did, events started to move quickly. He reviewed the evidence and reported the incident to his superior in Edmonton, who in turn spoke to his superior in Toronto.
Meeting between broker, RBC
Baba then arranged a meeting with Whitehouse and his immediate supervisor first thing in the morning on Jan. 22. Baba twice asked Whitehouse if he brought a prostitute into the office on Jan. 20 and both times he denied it. Only after being told there was videotape evidence did Whitehouse confess.
Baba allegedly gave Whitehouse a chance to explain himself, but no explanation was offered. He was fired and asked to leave the premises. As he was leaving, Baba gave him Cassandra’s phone number and suggested he arrange to pay her. If she continued to visit the office, Whitehouse’s home phone number would be given to her, he said.
Whitehouse took this to be a threat, but the court said it was a “reasonable response” from Baba to ensure she would have no reason to visit the office.
RBC relied on two grounds for dismissal: Whitehouse’s conduct in bringing a prostitute to the office and his leaving her alone in the lobby area, privy to client and corporate documents.
Justice McMahon of the Alberta Court of Queen’s Bench said the case was unique, and fell outside of the usual problems that justify dismissal such as: conflict of interest, breach of duty or fidelity, wilful disobedience, fraud or dishonesty, intoxication, serious incompetence or sexual harassment.
“(Whitehouse’s) conduct here cannot easily be described in any of these terms,” said Justice McMahon. “Other cases justify summary dismissal with the more general description of serious misconduct and revelation of character. Serious misconduct is not easily defined. It depends very much on the nature of the employment and the consequences of the act on the employer. Revelation of character relates to conduct which indicates character that is incompatible with continued employment — generally dishonesty or untrustworthiness.”
In ruling RBC had just cause to fire Whitehouse, Justice McMahon considered:
•the nature of an investment advisor’s duties, the employer’s expectations and the employment relationship;
•the nature and seriousness of Whitehouse’s conduct; and
•the impact of that conduct upon the business and reputation of the employer.
Whitehouse chose his employer’s offices as a place to take Cassandra. He had to know the building was being monitored. Interestingly, Whitehouse admitted that this wasn’t the first time he had brought a prostitute back to the office after hours.
“That conduct does more than simply reveal his then character,” said Justice McMahon. “It exhibited a contempt for his employer, his co-workers and their respective reputations in the business community. It shows a serious lack of judgment.”
He made the problem worse by abandoning her on the premises with access to information.
“That was a reckless disregard for his clients’ interests,” the court said. “The risk to client and corporate confidentiality was significant.”
The fact she didn’t take advantage of it was irrelevant — the fact he gave her the opportunity was serious enough.
When given a chance to come clean to his supervisors at the Jan. 22 meeting, he lied about it.
“Had there been no tape or entry logs, the inference from his answers is that he would have denied it all,” said Justice McMahon. “This was not a single testosterone-driven mistake by a 25-year-old. This man was 49. He was married with a young family. He was responsible for $125 million of client capital.
“He was a vice-president of the largest brokerage house in Canada. With his wealth and privileges came responsibilities which he clearly had difficulty recognizing. This is not to say that misconduct in the upper realms of the business world is unheard of, but from there the fall is further and the injury greater. The conduct of senior employees can become the acceptable norm for all employees. Thus an employer is justified in requiring strict compliance with its code of conduct by those who purport to lead.”
A ‘pattern of conduct’
The court said Whitehouse argued that he was severely intoxicated at the time and under stress at home and work. But the court wasn’t sympathetic.
“This was a pattern of conduct, not an isolated event,” said Justice McMahon. “It cannot be so easily excused. His dishonest answers to his manager were made when he was sober and at work and when he should have realized the significance of his actions.”
While one can empathize with a plea by Whitehouse that he needed help to combat his alcoholism and his high-risk lifestyle, he never sought help, at least from his employer, until he was confronted and fired, the court said.
There was no evidence of damage to the company’s reputation, but the court said tolerance of his conduct would impact the employer’s relationship with other employees and could seriously infect the working relationship at the office.
“It was important for management to restore order quickly and to redefine clearly the permissible limits on employee conduct,” said Justice McMahon. “Any lesser response would undermine the confidence of both employees and clients in the competence of management.”
For more information see:
• Whitehouse v. RBC Dominion Securities Inc., 2006 CarswellAlta 706 (Alta. Q.B.)
RBC countersuit dismissed
RBC Dominion Securities filed a countersuit against Whitehouse for defamation and for damages to its reputation.
But the court dismissed the counterclaim. It said there was no evidence of specific damage to the business or reputation. Some clients followed Whitehouse to his new employer, but that could happen under any circumstances. The news did travel fast through the industry, but RBC is a leader in its industry and it’s doubtful the news had much impact.
“In fact, it is likely that any risk of such damage was removed by the employer’s immediate dismissal of the employee,” said Justice McMahon. “The firmness of the employer’s response may in fact have enhanced its reputation for demanding good conduct from its employees.”
