Employee’s pocket dial reveals moonlighting on company time

Pocket dial let supervisor listen in on employee visiting customer of employee's private business during work hours
By Jeffrey R. Smith
|Canadian Employment Law Today|Last Updated: 12/11/2015

An Alberta worker is out of luck after challenging his dismissal following his employer’s discovery that he was performing work for his own company during business hours.

D’Arcy Ross was hired by IBM Canada in August 2010 to be a senior salesperson. The position was full-time with a salary plus commission and benefits. He had access to office space in Edmonton — though he was based in Toronto — but was a mobile employee who was on the road most of the time. He was provided with a company cellphone and maintained regular contact with his supervisor through phone and email.

When Ross was interviewed, he told IBM that he was the president of his own private business that he co-owned with his wife. The business sold and installed custom residential storage components, and Ross was responsible for operations while his wife paid the bills. He said that he had continued to run the business while he worked part-time as a salesperson for another company. However, he assured IBM that if he was hired full-time, he would transfer his responsibilities to his wife. IBM was fine with this arrangement and didn’t ask Ross to sever his relationship with the private company.

As part of his employment agreement, Ross had to agree to follow IBM’s business conduct guidelines, which required him to avoid situations where a conflict of interest could arise — an example of this was given as performing “non-IBM work or solicit such business on IBM premises or while working on IBM time.” The guidelines indicated that a violation could result in discipline up to and including dismissal.

Ross wasn’t satisfied with his work at IBM, as he wasn’t given his own territory or quota. In addition, IBM shifted its asset management focus to a more regional one instead of national. This led to his supervisor being placed in Calgary instead of Toronto and he felt this pressured him to move to Calgary.

In early 2011, Ross received a performance appraisal that described his work as needing improvement. Ross felt it wasn’t a fair assessment as he couldn’t work effectively without his own territory or quota.

Pocket dial after cancelled meeting

On Jan. 21, 2011, Ross had a scheduled telephone meeting — as was scheduled each week — with his supervisor. The supervisor emailed Ross a document to complete so they could discuss during the meeting, but Ross failed to complete it. Ross then cancelled the meeting, saying he had previously scheduled an appointment at the same time. The supervisor telephoned Ross later that day and Ross said he felt somewhat overwhelmed, “like drinking from a fire hose.”

A short time later on the same day, Ross accidentally “pocket-dialled” his supervisor twice. On the first call, the supervisor could hear Ross having a conversation with a customer of Ross’ private company. Immediately after the call ended, the second call came in and the supervisor could hear more of the conversation. It was also evident Ross was at the home of the customer. The two accidental calls lasted a combined three-and-a-half minutes.

That same afternoon, several work emails were sent to Ross but he didn’t’ respond to any of them. Phone records revealed he had made a call about his own business on the IBM phone.

The following week, the supervisor called Ross to ask him if there was anything impeding Ross’ commitment to his work. Ross didn’t mention anything regarding his private company.

On Jan. 31, the supervisor discussed the pocket dials with Ross. He sent an email to Ross outlining what was heard on the phone calls and that Ross was spending up to three hours a day working for his own company. The supervisor pointed out that this was a violation of IBM’s business conduct guidelines. In addition, IBM found out Ross had charged some long distance calls related to his own business to his IBM cellphone account and had used IBM equipment for the benefit of his business.

Ross immediately responded, saying he spent three hours per week, not per day, assisting his own company. He also claimed he tried to ensure he worked during his IBM lunch hours to avoid interfering with his IBM work. However, a week later, on Feb. 7, IBM terminated Ross’ employment for cause.

After his termination, Ross worked for his own business full-time for two years before joining another company. He sued IBM for wrongful dismissal.

The Alberta Court of Queen’s Bench found that IBM’s business conduct guidelines had no definition of “IBM time,” but it was clear that the intention of the parties in the contract that Ross’ employment would be full-time and he would “deal with other people who were working normal working days.”

The court agreed with Ross’ claim that the time spent on his own business was closer to three hours per week, not per day. This was a relatively minor breach of the guidelines, as was the brief use of IBM equipment and small amounts of money from long-distance telephone calls, said the court, which “warranted only a comment from IBM to the effect that this was not acceptable.”

Breach of guidelines wasn’t isolated incident

However, the court found Ross was given the opportunity to explain his “dereliction of duty” but didn’t acknowledge anything was interfering with his ability to devote full-time hours to IBM’s business. In addition, physically going to the residence of a customer of his private business on IBM time on Jan. 21, 2011, was “a major breach” of the business conduct guidelines, said the court.

The court also noted that this wasn’t an isolated incident — Ross acknowledged working three hours per week on his own business during IBM time all along.

“Mr. Ross’ own evidence prevents this court from concluding that Mr. Ross was, during the period in question, working full-time for IBM as he was required to do,” said the court. “On the contrary, the evidence establishes that Mr. Ross was working for personal gain on IBM time.”

Ross discussed his private business with IBM before being hired and assured the company he would transfer responsibility to his wife. It was clear he was aware of the guidelines and that he was expected to devote all of his attention during IBM business hours to his IBM work. As a result, IBM was not required to give Ross a warning and an opportunity to improve his conduct, said the court.

“Not only are there no mitigating circumstances relating to Mr. Ross’ misconduct, but his continuing lack of insight into IBM’s entitlement to compliance with the business conduct guidelines in their entirety establishes that Mr. Ross would be unlikely to change his attitude in the future and that it would be difficult for IBM to monitor any future conduct, especially in Mr. Ross’ autonomous setting,” said the court.

The dismissal was upheld.

For more information see:

Ross v. IBM Canada Ltd., 2015 Carswell Alta 1684 (Alta. Q.B.).

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