Workplace drug dealing provides after-acquired cause for termination

British Columbia employer had just cause based on evidence discovered after termination
By Rosalie Cress and William Skinner
||Last Updated: 08/07/2014

In most cases, employees who commit misconduct will face the consequences of their actions during their employment, in the form of discipline or even termination for just cause. But, what if the employer only learns of an employee’s misconduct after the employee is dismissed without cause? What recourse does the employer have?

The British Columbia Court of Appeal’s ruling in Van den Boogaard v. Vancouver Pile Driving Ltd. affirms that employers can rely on misconduct discovered after an employee’s dismissal to establish "after-acquired" just cause.

Kirk Van den Boogaard was a project manager for Vancouver Pile Driving, a marine contracting company. He was in a supervisory role, which required him to oversee site safety. He was also required to enforce drug prohibition policies. Van den Boogaard’s employment was eventually terminated without cause. However, he was not happy with the amount of severance offered to him and started a wrongful dismissal claim against the company.

At the time of his dismissal, the company was unaware that Van den Boogaard had been soliciting drugs from his direct subordinate, including during working hours. After Van den Boogaard turned in his company cellphone, however, the company discovered suspicious text messages from the phone to another employee. The messages showed that Van den Boogaard had asked to buy a variety of drugs from a subordinate employee, including some of which were listed under the Controlled Drugs and Substances Act.

Based on this evidence, the company took the position that it had after-acquired just cause to dismiss Van den Boogaard and was not liable for any further pay in lieu of notice. The court agreed.

The court took the same approach to the issue of whether there was after-acquired just cause as for any just cause termination. Using the "contextual approach," the court considered whether Van den Boogaard’s conduct — taking into account all the relevant circumstances of his employment — was objectively and fundamentally incompatible with his continued employment. In light of Van den Boogaard’s supervisory authority over the subordinate employee, and his employment obligations to ensure safety in the dangerous workplace and to enforce the company’s drug prohibition policies, the court found that Van den Boogaard’s conduct justified his termination for just cause.

It was a key part of the decision that the company had no idea Van den Boogaard had solicited or purchased drugs from other employees before his employment was terminated. The court made it clear that employers cannot rely on "after-acquired" just cause for termination if they knew about and condoned the conduct before the employee was dismissed (for example, by not investigating or disciplining the behaviour).

What does this mean for employers?

If an employee engaged in serious misconduct which was not known or condoned during his employment, employers should consider defending a subsequent claim by alleging after-acquired just cause. Employers may also want to consider a claim or counterclaim against an employee if he committed significant theft or fraud against the company. In addition, employers can take the following steps to improve their chances of proving after-acquired just cause:

• Make sure expectations for employees’ conduct are clear and consistently enforced. Although Van den Boogaard tried to argue that the company had a ‘lax’ approach to drugs in the workplace, the company’s policies helped show Van den Boogaard’s misconduct was not acceptable and was serious enough to warrant termination without notice.

• Investigate allegations of misconduct promptly and comprehensively, both during and after employment. A full and prompt investigation will help prevent an argument that the employer ‘condoned’ the conduct, in addition to providing evidence for a subsequent proceeding.

For more information see:

Van den Boogaard v. Vancouver Pile Driving Ltd., 2014 CarswellBC 1167 (B.C. C.A.).

Rosalie Cress is an associate with the Labour and Employment Group of McCarthy Tétrault in Vancouver. She can be reached at (604) 643-7175 or William Skinner is a summer student at McCarthy Tétrault’s Vancouver office. He has just completed the second year of his JD at the University of British Columbia.

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