Manager fired for hiding failed relationship with subordinate

Bitterness from breakup caused problems in the office; repeated denials breached company’s trust, court rules

The British Columbia Court of Appeal has upheld the dismissal of a manager who lied about his relationship with a subordinate after their breakup negatively affected the office environment.

Mike Carroll was a branch manager for Emco Corp., a plumbing and heating supplies company in Abbotsford, B.C. He had a three-year sexual relationship with a female employee who reported directly to him. During that time, Carroll was responsible for the employee’s pay raises, discipline, promotions and performance reviews.

In the late stages of their relationship, the employee was sometimes absent from work, which was uncommon for her. Carroll knew the absences were related to their relationship but denied it when a human resources manager inquired about them. Another employee also asked Carroll if he had a relationship with her but he still denied it. Rumours began circulating and Carroll’s supervisor asked him about it, which he again denied.

The affair ended bitterly and, as a result, the working relationship between the two deteriorated to the point where it was noticeable to other employees. When Carroll began a relationship with another female employee, it created a “tense atmosphere” in the office which disrupted the business.

The increasing antagonism between the two made the office a difficult place for other employees to work and some described the atmosphere as like “a soap opera” or “elementary school.”

Despite the fact the affair had become common knowledge, Carroll continued to deny his original relationship to his superiors. He only admitted it once his superiors knew about it and the employee confirmed the relationship.

Emco decided to terminate Carroll from his position as branch manager after learning the office had become a difficult environment for people to work and he wasn’t working with the subordinate with whom he had broken up. He received a letter from the vice-president and general manager stating he had “breached my trust and that of other senior managers and put yourself in a significant conflict of interest.”

The company also reassigned Carroll and the two women to separate branches. Carroll’s position would have the same salary and benefits but no supervisory responsibilities. He refused the reassignment and sued for wrongful dismissal.

The court agreed with the B.C. Supreme Court’s assertion that Carroll “deliberately and deceitfully failed to reveal his three-year relationship with his subordinate.” It noted the employer had a right to know about it so it could try to avoid the conflict of interest resulting from Carroll’s direct supervision and responsibility of the employee with whom he was involved. Carroll’s repeated denials of the company’s queries as to the nature of the relationship were a breach of the company’s trust and faith that he could effectively perform his duties as branch manager.

Carroll’s appeal pointed out certain errors in the trial judge’s reasons, but the court found these to be trivial and not consequential to the decision.

“The relevant circumstances were the sexual affair and its effects on the performance of (Carroll) and (the female employee) of their respective obligations to (Emco), on the working conditions in the branch generally and on the business of the branch,” the court said. “(Emco) and its other employees in the branch were needlessly subjected to several months of what the trial judge described as a ‘horrific office situation.’”

The court ruled Carroll’s actions were a legitimate reason to remove him from his position as branch manager because Emco had reason to believe it couldn’t trust him to do the job. The company notified him immediately of its concerns and offered him another position, so it did not terminate the employment relationship. Carroll’s refusal of the new position and his launch of the wrongful dismissal suit was the termination.

For more information see:

Carroll v. Emco Corp., 2007 CarswellBC 717 (B.C. C.A.).

To read the full story, login below.

Not a subscriber?

Start your subscription today!