Brauer v. Pure Energy Services Inc., 2010 ABQB 782

Court of Queen ’ s Bench of Alberta Citation: Brauer v. Pure Energy Services Inc., 2010 ABQB 782 Date: 20101208 Docket: 1001 06003 Registry: Calgary Between: Kim Brauer Plaintiff - and - Pure Energy Services Inc. Defendant _______________________________________________________ Reasons for Judgment of the Honourable Mr. Justice R.J. Hall _______________________________________________________ [ 1 ] The Plaintiff applied for a

summary trial based upon affidavit evidence, cross-examination on those affidavits, and documents exhibited during the examinations on those affidavits. The Defendant did not oppose the application. I granted the motion for

summary trial, and the matter proceeded to argument on the above evidence. [ 2 ] This is an action for wrongful dismissal. The Plaintiff Kim Brauer (“Ms. Brauer”) was employed by the Defendant Pure Energy Services Inc. (“Pure”) starting on December 2, 2007 in a sales capacity as an account manager. In December, 2008 the Plaintiff

was promoted to Team Lead, responsible for the sales and marketing of the Defendant’s testing services across western Canada. In June of 2009 the Plaintiff was appointed the Defendant’s Team Lead in its Completion Sales Department. In March of 2009 every employee of Pure saw a reduction in their salary, which reduction Ms. Brauer accepted. In June of 2009 Pure entered into a plan of arrangement under the Business Corporations Act which saw the merger of Pure with another company. That merger saw a reduction and consolidation of the company’s work forces. Ms.

Brauer was offered continued employment as a sales Team Lead and accepted that position. She saw a substantial reduction in her base salary to $102,000.00 per annum, a reduction in her vacation entitlement and an alteration in her commission structure. [ 3 ] The Plaintiff’s position continued until March 5, 2010 when the Plaintiff’s employment was terminated by the Defendant without cause.

At no time in these proceedings has the Defendant maintained that the Plaintiff was dismissed for just cause. [ 4 ] The issues at trial are the length of notice of termination to which the Plaintiff was entitled; calculation of income to be paid to Ms.

Brauer for that period; and whether the Plaintiff is entitled to damages in respect of a stock option agreement that existed at the time of her termination. [ 5 ] The Defence adds to these issues; has the Plaintiff failed to properly mitigate her loss, and if so to what extent, if any, are her damages to be reduced. [ 6 ] In determining these issues, I am directed to the oft quoted passage in Bardal v.

The Globe and Mail Ltd. (1960) 1960 CanLII 294 (ON SC) , 24 D.L.R. (2d) 140, where Chief Justice McRuer of the Ontario High Court stated: There can be no catalogue laid down as to what is reasonable notice in particular classes of cases. The reasonableness of the notice must be decided with reference to each particular case, having regard to the character of the employment, the length of service of the servant, the age of the servant and the availability of similar employment having regard to the experience, training and qualifications of the servant. [ 7 ] Here, the Plaintiff was 38 years of age.

That is to say she was neither young nor old; rather she was in the prime of her career as a sales person. It has been suggested, and I agree, that her particular age is a neutral factor in this matter. [ 8 ] The Plaintiff was employed with Pure for 2 years and 3 months, so it is certainly not a lengthy period of employment, and that is an important factor in my deliberations. [ 9 ] The character of the employment is that of a senior salesperson. While there is no evidence that Ms.

Brauer acted in a management capacity, nevertheless, the role of a senior salesperson in charge of a large book of business is not a job that is likely to be easily replaced by walking across the street, particularly at the level of remuneration which she was receiving in that position, when one considers both salary and commission earnings.

In considering this factor, the court is looking to determine what a reasonable period of time would be for the employee to find replacement employment of similar nature to that which has been terminated. [ 10 ] Turning to the Plaintiff’s background experience, training and qualifications, Ms. Brauer has some 15 years of sales position experience, and calls herself, in her resume, an executive sales professional. Prior to working with Pure, Ms. Brauer had extensive experience in information technology sales with companies such as Anasoft Group Inc., IBM - Software Division, and GE Capital ITS Calgary.

While with Pure, she developed expertise in the oil and gas equipment field as a salesperson. These skills and this experience would be expected to serve her well in her quest to find replacement employment. [ 11 ] The Plaintiff argues for a notice period of 6 months, relying on a number of cases as follows: Aleniuk v. West Town Ford Sales Ltd. 28, A.R. 473 MacLeod and Osachoff v. Geo Services North America Ltd. , 44 A.R. 93

Wadden v. Guarantee Trust Company of Canada , 1987 CanLII 3309 (AB KB) , 76 A.R. 138 Ambler v. J. Gilmore Interiors Inc. [1992] A.J. No. 1056 Woolard v. Union Life Insurance Company of Canada [2002] B.C. Supreme Court 1178 Larsen v. A & B Sound Ltd. [1996] B.C.J. No. 696 [ 12 ] Defence counsel counters by distinguishing these cases, briefly stated as follows: in Aleniuk and in MacLeod and Osachoff the Plaintiffs were managers. In Wadden the type of employment in which the Plaintiff was engaged was a clerical role.

Due to circumstances existing at that time the Plaintiff was unable to find replacement employment for 21 months after termination. In Ambler the employer had made a series of unfounded allegations against the Plaintiff subsequent to the dismissal. In Woolard the Plaintiff’s position was one of considerable responsibility. She was terminated at a time when she was pregnant. She was in an industry that was in the process of contracting at the time she was terminated.

In Larsen the Plaintiff was 47 years of age, and had been persuaded by the Defendant to leave employment with another company to work for the Defendant. He thereafter had difficulty obtaining new employment due to unfounded accusations of theft. [ 13 ] The Defence relies on the following cases: Leeuwerke v. MAI Canada Ltd. [2001] A.J. 565 , wherein 3 months notice was provided for a 33 year old salesman who had been employed for 3 years; Anstead v. Park Royal Homes Inc. [2009] A.J.

No. 319 , wherein 2 and a half months notice was provided for a 50 year old sales consultant who had been employed for 2 and half years; Dechenes v. Little Employment Group Inc. 2003 CanLII 7172 (ON SC) , [2003] O.J. No. 5394, wherein 3 months notice was provided for a 56 year old sales representative who had been employed for 2 and a half years; O ’Shaughnessey v. Drake International Inc. [1986] O.J.

No. 793 , wherein 3 months income in lieu of notice was considered appropriate for a 3 year employee. [ 14 ] While the cases cited by both counsel are helpful, each individual case must be considered on its own merits. The Alberta Court of Appeal in Bagby v. Gustavson International Drilling Company Ltd. et al 1980 ABCA 227 (CanLII) , [1980] A.J. No. 743 quoted McCartan v.

Belfast Harbour Commissioners [1911] 2 I.R. 143 with approval, where Lord Lorburn stated: It is an endless and unprofitable task to compare the details of one case with the details of another, in order to establish that the conclusion from the evidence in one case must be adopted in the other also. Given the rule of law the facts of each case must be independently considered, in order to see whether they bring it within the rule or not. [ 15 ] I am persuaded that Ms. Brauer’s position of employment was a senior one, albeit not a management position.

Finding a replacement position of this caliber would be more difficult than would be the case for a more ordinary sales position. [ 16 ] The Plaintiff was admirably suited to find replacement employment, given her excellent resume, background and experience. The period of employment, 2 years and 3 months, was short. The Plaintiff was not lured from another position with promises made by Pure. There are no aggravating factors to be considered in the course of the termination of the Plaintiff’s employment or thereafter. I find

that the appropriate notice period in this case is 4 months. [ 17 ] The parties are agreed that the Plaintiff’s base salary plus automobile allowance amounted to $9,400.00 per month. The parties argue as to the amount of commission that should be attributed to the Plaintiff as being the amount she would have earned during the notice period. [ 18 ] The Plaintiff points to the fact that, inclusive of her salary and commission, for the period from January 1 to March 5, 2010 (a period of 9 weeks) she received income of $40,866.00, which translates to $4,540.67 per week.

Transferring that to a monthly calculation results in $19,676.00 per month. [ 19 ] The Defendant’s evidence is that the Defendant’s salespersons’ commissions decline each year in the second quarter of the calendar year as a result of the substantial slow down of the oil and gas industry due to spring break-up. The Plaintiff, in cross- examination on her affidavit, acknowledged that commissions are generally slower in April and May of each year for the same reason. [ 20 ] The Defendant shows that the Plaintiff earned commissions from July 1, 2009 to March 5, 2010 in the total amount of $30,679.00.

The Defendant calculated that to be a 9 month period, when in fact, it is 35 weeks, just slightly greater than 8 months. [ 21 ] There are no comparable commission figures available for the months of March, April, May and June of any previous year to give me guidance as to commissions likely to be earned during and including the spring break-up period.

Counsel for the Defence maintains that the $30,679.00 in commissions earned by the Plaintiff over the 35 weeks prior to her dismissal is a generous comparison, in that the period under consideration includes better months for commissions, and excludes the bad months of April and May. [ 22 ] The Plaintiff maintains, however, that there were some large contracts being pursued by Ms. Brauer at the time of her dismissal, which, if successful, would have resulted in higher commission income to her. [ 23 ] I am satisfied that the best indicator, given to me in evidence and argument, of commission earnings which Ms.

Brauer could have anticipated to receive is the $30,679.00 which she received in the previous 35 weeks. On a weekly basis, that amounts to $876.55 per week, which in turn converts to $3,795.00 per month. [ 24 ] Therefore, the amounts which are to be used in calculation of Ms. Brauer’s damages are as follows:

a) salary and auto allowance per month $9,400.00

b) commission per month $3,795.00 Total: $13,195.00 x 4 months = $52,780.00 Less: amount paid by Pure on termination (6,360.00) $46,420.00 [ 25 ] The Plaintiff argues that she has suffered damages because she was precluded from exercising an option to purchase shares of Pure pursuant to a Stock Option Agreement entered between the parties on July 8, 2009 and the associated Stock Option Plan. [ 26 ] No shares under the stock option agreement were to vest with Ms. Brauer until July 8, 2010, in accordance with the terms of that agreement.

[ 27 ] Ms. Brauer’s employment was terminated on March 5, 2010. If one adds the 4 months notice period, the latest time at which her employment ceased must be seen to be July 5, 2010. By that date none of the options had vested in Ms. Brauer, and as such she could not exercise the options. Accordingly, no loss was suffered by Ms. Brauer in respect to the stock option agreement, regardless of whether the date she ceased to be an employee is deemed to be March 5, 2010 (the date that she was dismissed) or July 5, 2010 (the date upon which the reasonable notice period expires).

It is unnecessary, therefore, for me to determine which of the foregoing is the date her employment ceases, for purposes of interpreting the Stock Option Agreement, and I decline to do so. [ 28 ] The Defendant argues that the Plaintiff failed to properly mitigate her damages. The Plaintiff has given evidence as to all of the efforts that she made to find replacement employment.

While it is clear that during the 4 month notice period which I have assessed, there were periods when she was assisting her fiancee in his business, and periods when she took vacation, nevertheless, I am satisfied that her demonstrated actions in seeking employment were reasonable and do not constitute a failure on her part to mitigate damages. Further, there is no evidence put forth by the Defence of any other job which she could have taken, nor the amount that she would have earned during the notice period had she taken such an employment.

Accordingly, the argument that the Plaintiff has failed to mitigate her damages fails. [ 29 ] In the Statement of Claim the Plaintiff seeks pre-judgment interest. The Plaintiff is entitled to pre-judgment at the rate set out in the regulations to the Judgment Interest Act for pecuniary damages, to be calculated from each date that payments of salary or commission, as the case may be, would have been paid had the Plaintiff’s employment not been terminated, until the date of these reasons. [ 30 ] Counsel may speak to me regarding costs within the next 30 days. Heard on the 1 st day of December, 2010.

Dated at the City of Calgary, Alberta this 7 th day of December, 2010. R.J. Hall J.C.Q.B.A. Appearances: John H. Wilson, Q.C. Wilson Laycraft for the Plaintiff D. Robb Beeman Heenan Blaikie LLP

for the Defendant