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Procedural jockeying during wrongful dismissal litigation backfires for employer

It is a common litigation playbook for many employers at the receiving end of wrongful dismissal lawsuits: delay as much as possible — and then delay some more.

But an effective litigation strategy is both art and science. And as one employer recently learned in a decision titled Ferguson v. Yorkwest Plumbing Supply Inc., simply ignoring the litigation is not only ineffective, but can result in devastating consequences for an organization.

The procedural jockeying

The Ferguson case involved a lawsuit by a terminated employee against his former employer. After failed attempts to reach a settlement, the employee’s lawyer tried to schedule the next step in the litigation process, known as “examinations for discovery.” That’s when the employer’s delay tactics began.

Counsel for the employer ignored most emails attempting to arrange discoveries. Having received no response from the employer’s lawyer, counsel for the employee scheduled a discovery date unilaterally.

Three days before the scheduled discovery, the employer’s lawyer wrote to advise that neither he nor his client was available for the selected date and that he would be out of the country for weeks thereafter. The employee’s lawyer then asked for a new date following opposing counsel’s return from vacation, but received no response.

The employee’s lawyer then scheduled a second discovery date unilaterally. One week before the second scheduled discovery, the employer’s lawyer advised that he could not attend for medical reasons and suggested alternate dates, months later. The employee agreed to the proposed dates on the condition that the employer provide certain relevant documents in advance. However, none of those emails were answered and no documents were delivered.

As a result of this silence, the employee’s lawyer arranged a third discovery unilaterally.

Tellingly, the employer inadvertently wrote directly to the employee’s lawyer three days before the third examination date, asking “can we delay further?”

Judge issues warning

As a result of the employer’s ongoing delay tactics, the employee brought the matter before a judge at a case management conference. The judge set a firm deadline for the completion of discoveries.

In doing so, he issued a prescient warning: if the employer failed to attend discoveries by this firm deadline, an “admonishment” directed at the [employer]” would be necessary.

‘Enough was enough’

The employer should have heeded that warning. Instead, he proceeded to argue with the employee, and then ultimately failed to attend the scheduled discovery date for a fourth time.

The employee then brought a motion before a new Judge, seeking an extraordinary remedy: an Order striking the employer’s defence. Such a remedy would effectively end the case, entitling the employee to everything claimed in the lawsuit.

For that reason, this remedy is only granted in the most egregious of situations, as Judges will bend over backwards to ensure cases are decided on their merits.

In this case, however, the judge decided that “enough was enough”, as the employer’s repeated attempts “to kick the discovery can further down the road” warranted the extraordinary remedy of striking their defence, which granted the employee everything they sued for.

Lessons for employers

Courts are increasingly aware of the imbalance of power and resources between an employer and a terminated employee with no income. Particularly in straightforward wrongful dismissal matters, an overly dismissive or bullying approach can backfire for employers. The last thing an employer should want is to fuel the David v. Goliath narrative that is often preferred by terminated employees.

Secondly, a judge’s warning should never be taken lightly. A court-ordered deadline must be adhered, unless there are extenuating circumstances, such as a health emergency.

Finally, employers should do everything possible to ensure they are never in a position to have their defence to a lawsuit struck. It is a devastating end to a wrongful dismissal case for an employer. Oftentimes, this is as simple as ensuring you are working with the right employment counsel.

John Hyde is the managing partner at Hyde HR Law in Toronto. He advises management on all aspects of employment and labour law, including representation before administrative tribunals, collective agreement negotiation, arbitrations, wrongful dismissal defence and human rights.