The British Columbia Court of Appeal has ordered a new trial after overturning a wrongful dismissal decision regarding a CIBC financial advisor who was fired for inappropriate transactions with an overseas client.
Guiyun Ogden, 42, was a licensed financial advisor for CIBC in Vancouver. Ogden moved to Canada from China in 2000 and, after joining CIBC in 2004, built a portfolio of high-end clients, specializing in people who immigrated from China.
On Sept. 27, Ogden received a final warning letter for failing to avoid a situation “involving an actual or apparent conflict of interest” by having the associate on her portfolio and submitting a transaction in which the associate had entered her own data. The letter indicated failure to follow procedures in the future would result in termination without notice.
Devastated and upset, Ogden asked her general manager why she received the warning letter, and she was told it was because she should have known her associate input her own data. Ogden argued she couldn’t have known without the associate telling her — and the associate later testified she didn’t realize the move counted as a transaction. She also pointed out that the associate was in her portfolio because CIBC had directed her to include the associate a few years earlier.
Early in the morning of Sept. 9, 2010, Ogden received a phone call from a client who needed to wire $100,000 from China to her account or she would lose a deal on a new home in Vancouver. She needed two accounts to transfer $50,000 each — Chinese regulations prevented transfers of more than $50,000 out of China — so she asked Ogden if she could transfer the money to two of Ogden’s accounts. This practice was common in China, where bankers and clients had close relationships.
Ogden thought quickly about it and didn’t think there was any problem, so she agreed and moved the funds to the client’s Canadian account the next day.
In October, the transaction came to light in a review of transactions. A further investigation was launched and the corporate security investigator interviewed Ogden on March 15, 2011. The investigator took the position it was a very serious issue and Ogden felt intimidated. The investigator discussed the transaction and the code of conduct, but didn’t inquire as to the circumstances of the incident that pushed Ogden to make the decision.
The investigator reported to a management panel, which felt it was important for CIBC to control Ogden’s exit rather than let her resign — the panel was aware of Ogden’s unhappiness with two previous discipline letters and wanted to keep her substantial portfolio. Ogden’s employment was terminated for cause, finding she had breached the higher level of trust expected of bank employees.
he court noted Ogden was entitled to time and opportunity to improve her performance after a final warning is issued. However, the decision to terminate came because of the wire transfer, which happened before the final warning was given following the mortgage incident. There was no misconduct between the final warning and the termination, said the court.
Additionally, the court found the prior incidents on Ogden’s record — the loan rate incident, clothing gift incident and mortgage incident — all had reasonable explanations and either did not occur or did not justify discipline. As a result, only the wire transfer incident could form a basis for just cause, said the court.
The court also found the conflict of interest provision in CIBC’s code of conduct was vague and open to confusion, and the only training employees received was an annual online course. Because there was no clear rule, Ogden was forced to use her judgment for the wire transfer — in circumstances in the middle of the night, with a panicked client and no one to consult for advice. That judgment led Ogden to honestly conclude there was no problem with the transaction, said the court. In addition, Ogden received no benefit from the transaction and CIBC acknowledged there was no actual conflict of interest — which was the focus of CIBC’s policy.
The court found CIBC was liable for breach of contract, unjust dismissal, and compensatory damages for bad faith, along with aggravated and special damages.
The Court of Appeal found that the trial judge had erred in considering cumulative cause with the warnings before the wire transfer, as CIBC did not allege cumulative cause and used only the wire transfer as the basis for terminating Ogden’s employment. The appeal court also found the trial judge misapprehended the evidence concerning whether the wire transfer was a breach of CIBC’s code of conduct – the evidence didn’t suggest it was “an uncertain area. Rather, the wire transfer was a breach of Ogden’s employment agreement prohibiting the mix of personal and bank business and the main issue was whether this amounted to just cause.
Given the trial judges errors in law regarding cumulative cause and whether the single incident of the wire transfer was just cause, the appeal court allowed the appeal and ordered a new trial.
For more information see:
- Ogden v. Canadian Imperial Bank of Commerce
2015 CarswellBC 1070
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