Avoiding the Pitfalls of Enticement
In employment law circles, the terms “enticement” or “inducement” refer to the more aggressive methods by which an employer will woo an individual to accept an employment offer. In a competitive job market, employers will often go to great lengths to convince a person to leave his/her existing employment and join the team.
These efforts can, however, have nasty consequences for the employer if the new employment proves to be short-lived. The courts have consistently awarded substantially increased damages to plaintiffs who have been enticed from secure, gainful employment only to find themselves unemployed shortly thereafter.
The kind of enticing conduct which gets the employer into hot water isn’t necessarily all that extreme. A typical situation might involve the use of a head-hunter who identifies an attractive candidate and then pursues that candidate. That effort might involve repeated overtures, the presentation of increasingly sweet offers such as signing bonuses, holding out the prospect of future promotions and salary increases and long-term job security, etc.
The key, in the eyes of the courts, seems to be that the employer has sought out and attracted an individual who, if left alone, would have continued happily with his/her prior employment situation.
When the new employment relationship ends prematurely and the jilted employee pursues damages for wrongful dismissal, the record of the employer’s efforts will be laid out for the court. The employee will be arguing that increased damages are warranted because of the negative impact of the employer’s behaviour on his/her employment situation.
The courts have been sympathetic to these claims, but typically only if the new relationship has ended within roughly 2 years of its commencement. The damages awarded to the employee can be substantial. This is one instance in which the presumption that short employment means little in the way of damages is clearly mistaken.
A recent Ontario Superior Court of Justice decision is an example of these disproportionately high damages. Janet Deplanche had been employed for substantially all of her working life as a business manager at car dealerships. She had been working at a single dealership for 10 years.
Deplanche’s relationship with that employer had been very positive. She was popular with staff, and with the managers and owners. She was recognized for her pleasant demeanour, her accuracy, her sales skills, and was generally viewed as a valued member of the sales team. Deplanche regarded that job as the one she would hold until she could no longer work.
An acquaintance of Deplanche’s was the General Sales Manager at Leggat Pontiac Buick Cadillac Ltd. According to Deplanche, this acquaintance frequently tried to convince her to leave her existing employment to join Leggat. The acquaintance made statements about what a great place Leggat was to work and that, though Leggat paid a lower percentage as a commission, it would be more than made up by the higher volume of sales.
Deplanche’s evidence was that she repeatedly rebuffed the acquaintance’s advances, stating that she was not a good candidate for a change, had had some personal problems, was happy in her current employment, and would not make a change lightly. The acquaintance persisted, stating that Deplanche would become part of a “dream team” of business managers at Leggat.
Eventually, Deplanche advised the acquaintance that she would consider working for Leggat. She commenced her employment there in April, 2002.
At the end of May, 2004 Deplanche’s employment with Leggat was terminated apparently due to the dealership’s dissatisfaction with her performance and level of productivity. At the date of her termination, Deplanche was 57 years old.
The Court concluded that Leggat spent a good deal of time trying to persuade Deplanche to leave what it knew was a secure job, where she was happy, and to join the team at Leggat, knowing that Deplanche had expressed reservations about doing so. The Court felt that Leggat’s approaches went beyond the ordinary degree of persuasion, and constituted enticement such that they affected the length of the appropriate notice period.
In the result, Deplanche was awarded 8 months’ pay in lieu of notice as damages for wrongful dismissal. But for the finding of enticement, it is likely Deplanche would have been entitled to roughly 3 months’ pay in lieu.
The simple way for employers to avoid this top-up of damages is to be assiduous about the use of employment contracts. A lawful, and binding, employment agreement containing a not-for-cause severance formula effectively serves as a “get out of jail free” card for the employer in these instances.
By superseding the common law entitlement to damages in lieu of reasonable working notice, the contractual severance clause protects the employer from liability in these enticement or inducement situations. It is a simple step which should be utilized in relation to all new hires and particularly those when the employer has gone beyond the normal measures to convince the individual to accept an employment offer.
Even better, the employment contract should state that the individual was securely employed at the time of the offer, knew the impact and associated risks of accepting the employer’s offer (and leaving his/her existing employment), and did so knowingly and willingly.
This is just another instance in which giving some forethought to the proper documentation of the employment relationship can save the employer from substantial damages. If your business is not already using employment agreements, now is the time to start.