Six-month notice of resignation upheld for BlackBerry exec

Court agreed contract provision was reasonable to allow for transition of important position
By Jeffrey R. Smith
|Canadian Employment Law Today|Last Updated: 05/14/2014

A former BlackBerry executive must give his employer six months notice of resignation, the Ontario Superior Court of Justice has ruled.

Sebastien Marineau-Mes was a long-time employee of QNX Software Systems, a software company that was acquired by Waterloo, Ont.-based BlackBerry. Marineau-Mes stayed on with BlackBerry and, eventually reached the position of senior vice-president, software, by early 2013.

In the fall of 2013, Marineau-Mes was offered another promotion to executive vice-president, platform development (EVP). In this role, he would be responsible for about 3,000 employees, including 11 vice-presidents and 70 directors. On Sept. 24, BlackBerry gave Marineau-Mes a letter of confirmation of the promotion and a contract. After his lawyer reviewed it, Marineau-Mes signed the contract on Oct. 16.

The employment contract included a provision that stated Marineau-Mes could resign from his position “at any time upon providing six months prior written notice.” The provision also stipulated he must provide “active service” during the notice period unless BlackBerry waived it. He would also receive only his base salary for the six-month notice period plus “reasonable unpaid expenses,” and his benefits would stop on the date of termination. Finally, the contract specified that termination “for good reason” would not be considered a voluntary resignation. “Good reason” was defined as a “material and detrimental alteration” of his duties or responsibilities, a decrease in his salary of at least ten per cent, exclusion from any profit sharing, bonus or other incentive plan, a “material breach” of the contract by BlackBerry, or a relocation of his principal office more than 50 km from its current location.

BlackBerry didn’t announce Marineau-Mes’ promotion because it had placed a freeze on promotions earlier in 2013. Only senior executives knew about it.

Disgruntled exec went looking elsewhere

Late in 2013, BlackBerry went through some tough times, including the appointment of a new CEO. Marineau-Mes was told his role might end up being narrower in scope than originally thought. Marineau-Mes wasn’t pleased with this development and began talks with rival tech company Apple. In December 2013, Apple offered him a vice-president position involved with developing operating system softeware.

On Dec. 23, Marineau-Mes gave BlackBerry his notice of resignation in writing. He said he would probably join Apple in two months. BlackBerry told him he was bound to his contract, which required him to be available for a six-month notice period.

Marineau-Mes challenged the contract, arguing it wasn’t enforceable because his original intended role as an EVP changed and qualified as a “good reason” to end the contract. He also said the contract violated the Ontario Employment Standards Act because employees are entitled to accrue vacation during both active and inactive periods of employment, the six months notice was an unenforceable non-compete covenant, and it was unfair for BlackBerry to try to prevent him from joining Apple.

The court disagreed with Marineau-Mes’ claim that the contract’s vacation term was contrary to the Employment Standards Act. Marineau-Mes argued the date of termination was the last day of service — which for him was Jan. 6, 2014, well before the end of the notice period — but the court found the date of termination would be the end of the notice period. In fact, BlackBerry continued to pay Marineau-Mes his salary and vacation pay after his last date of work. The fact he wasn’t called to active service wasn’t surprising due to the dispute, said the court.

The court also noted that even if the contract allowed for the failure to pay vacation pay until the end of the notice period, only that provision would be null and void, not the entire contract.

The court found Marineau-Mes did get promoted to the position of EVP, as he received a pay increase and the promotion was confirmed by the BlackBerry board. Even when the company went through tough times, Marineau-Mes continued to play an important role in discussions for the company’s direction, said the court. The fact he was told the scope of his role might not be quite what was originally planned didn’t change the fact he was already an EVP. Such conversations would not constitute a “good reason” for resigning, said the court.

In addition, the court found it wasn’t surprising Marineau-Mes’ role changed after he announced his resignation.

Notice period reasonable for transition of important position

As for the six-month notice period, the court found it was reasonable for BlackBerry to ask Marineau-Mes to be available to perform duties for that amount of time, given the importance of his position. And, said the court, it was not equivalent to a non-compete covenant because Marineau-Mes was still being paid during the notice period.

“I do not think that requiring Marineau-Mes to assist with his transition out of the company, rather than performing his usual duties as senior vice-president, constitutes a material and detrimental alteration within the meaning of the contract,” said the court.

The court declared the contract between BlackBerry and Marineau-Mes was binding and Marineau-Mes was obligated to provide six months’ written notice of his resignation — meaning his services should be available to BlackBerry and he would continued to be paid until June 23, 2014. See BlackBerry Ltd. v. Marineau-Mes, 2014 CarswellOnt 3522 (Ont. S.C.J.).