Name of case: Donald Norman Evans v. Teamsters Local Union No. 31

Court appealed from and date of judgment: Judgment of the Yukon Territory Court of Appeal dated September 25, 2006.

Facts: Active for 23 years as a business agent in the Whitehorse, Yukon, branch office of Teamsters Local Union No. 31, Donald Evans was one of only two employees in that office, the other being his wife. When a newly-elected union president took office in January 2003, he decided to terminate the employment of Evans, who had supported the defeated incumbent.

On January 2, 2003, the new president faxed a letter to Evans which stated: "As you know, a new executive board was elected and took office today, January 2, 2003. Pursuant to Section 13 of the Bylaws your appointment as a Business Agent ceases as of this date. As a member of the Teamsters' Joint Council No. 36 Severance Pay Plan, you are entitled to a significant severance payment. In addition, we are prepared to meet and discuss with you the time required for you to wind up outstanding matters."

In a telephone conversation that same day, which Evans surreptitiously tape-recorded, the union president confirmed that Evans' employment was terminated as of that day, but said that he intended to keep the Whitehorse office open, with Evans' wife continuing in her present job. In response to a question as to how much time he needed, Evans replied that he would like to stay on until the end of the year and asked that his wife be promoted to replace him as business agent. Evans' lawyer wrote to the president the next day, saying that Evans was prepared to accept 24 months' notice of termination of employment and suggesting that this be done through 12 months of continued employment followed by payment of 12 months' salary in lieu of notice. There was a continuing exchange of correspondence in which the union lawyer insisted that the January 2 letter "was not intended as termination without notice," while Evans' lawyer disputed that position but pushed for negotiations. Meanwhile, the union continued to pay Evans' salary and benefits.

Evans' lawyer continued to press for the appointment of Evans' wife as business agent on conditions that he specified, stating in an April 2003 letter that this was "inextricably related to the potential settlement of Mr. Evans' wrongful dismissal claim." In a May 12, 2003 letter, the union lawyer replied: "My client is unable to agree to Ms. Evans' demands, for reasons that are too extensive to enumerate. There appears to be no basis for further negotiations. On behalf of the Local, we request that Mr. Evans return to his employment no later than June 1, 2003, to serve out the balance of his notice period of 24 months. To be clear, the total notice period is the 24 months from January 1, 2003 until and including December 31, 2004. If Mr. Evans refuses to return no later than June 1, 2003, my client will treat that refusal as just cause, and formally terminate him without notice."

Case history: The trial judge ruled in Evans' favour, finding that when the union president first wrote to him in January 2003, "the termination letter had the effect of repudiating the employment contract and putting it to an end." With respect to subsequent events, the judge held that "what the union did was terminate Mr. Evans and then attempt to re-hire him for an additional term. However, the negotiations to enter into such a new contract of employment ultimately failed. Thus, the union's termination of Mr. Evans' employment on January 2, 2003 was without cause and without reasonable notice and therefore constitutes a wrongful dismissal."

The trial judge rejected the contention that Evans had failed to mitigate his losses. In regard to seeking other employment, the judge cited Evans' testimony that, given his age and lack of experience at anything other than union work, his chances of finding another job in Whitehorse were "zip." He concluded that "I was not particularly impressed by the efforts of Mr. Evans to obtain alternate employment.... I agree that he put minimal effort into the task, but there is little or no evidence that it would have made a difference if he had done more." As for the option of serving out the notice period in his own job, the judge found that Evans' refusal to do this did not breach his duty to mitigate because "[he] believed the working relationship had been poisoned by the circumstances that led up to and followed his termination on January 2, 2003. While some of Mr. Evans' fears in that regard may have been over-stated, they were not without foundation and were therefore not unreasonable."

Taking into account that "[t]here was virtually no evidence of other similar employment available in the Yukon," the trial judge determined that the appropriate notice period was 22 months and awarded Evans damages in lieu of notice of $100,008.79.

The union appealed the trial judge's decision to the Yukon Territory Court of Appeal. It did not dispute the finding that Evans had been wrongfully dismissed or the determination of the notice period as such, but rather argued that the judge had erred in ruling that Evans had fulfilled his duty to mitigate. It submitted that, particularly in view of the absence of other employment, the duty to mitigate obliged Evans to accept the opportunity to return to his job for the remainder of the two years of working notice. As well, the employer maintained, there was no objective basis for the judge's finding that Evans had reason to believe that the working relationship was too poisoned to make that possible.

Holding that "[t]he evidence does not support the conclusion that Mr. Evans' circumstances, viewed objectively, justified his refusal to resume employment with the union," the Yukon Territory Court of Appeal allowed the employer's appeal and set aside the trial judge's award of damages.

Writing the unanimous decision of a three-member panel of the court, Justice Allan Thackray found that, "[w]hen all of the evidence is considered, it is clear that there was a job open for Mr. Evans and that he would be paid for two years from 1 January 2003. It is equally clear that this was known to Mr. Evans. The job was available to Mr. Evans on essentially the same terms that he had held it before."

Judge Thackray acknowledged that "[t]he key difference, of course, was that he would be working in a politically charged environment under the ticking clock of a two-year notice period. This raises the second part of the equation: namely, was it reasonable of Mr. Evans, in these circumstances, to refuse the job?"

In determining that the trial judge erred in finding that Evans' refusal to accept the working notice was reasonable and did not constitute failure to mitigate, Thackray noted first that "[t]he factual [finding] by the judge – that Mr. Evans was not qualified for other jobs in Whitehorse and did not even attempt to look for one – is highly relevant to the legal question of whether Mr. Evans had a legal duty to mitigate his damages by accepting re-employment with the union." Against this background of a lack of other employment options, Thackray found that the trial judge had failed to apply an objective test to assess whether Evans' fears of an intolerably poisoned work relationship were reasonable, but had instead ruled only that, as Thackray put it, "from Mr. Evans' perspective the 'fears' were not without foundation."

Indeed, Thackray observed, "[t]he fact that Mr. Evans was prepared to resume his old job was never in doubt and it was never contended otherwise. His counsel as early as 3 January 2003 wrote that Mr. Evans 'would be prepared to remain working as a Business Agent throughout 2003.' This was consistently maintained throughout the negotiations which at no time explored the ... reasons for apprehension that subsequently emerged in the judge's reasons."

Thackray cited the statement of the British Columbia Supreme Court in Smith v. Aker Kvaerner Canada Inc., [2005] B.C.J. No. 150 (QL) that, "[i]n seeking and accepting alternative employment, the plaintiff has a duty to act reasonably and to take such steps as a reasonable person in the plaintiff's position would take in his own interest to maintain his income and his position in his industry, trade or profession. The duty involves a constant and assiduous application for alternative employment, an exploration of what is available through all means." Finding that Evans failed to meet this standard in refusing the offer from the union and that the trial judge erred in finding otherwise, Justice Thackray on behalf of the Court of Appeal allowed the appeal and set aside the award of damages in lieu of notice.

Issue(s): Whether employee’s damage award for wrongful dismissal ought to be reduced or eliminated because of his failure to mitigate his damages by accepting a new offer of employment from the employer.

Status: Heard January 29, 2008. Judgment Reserved.

Lancaster Reference: For analysis of the Yukon Court of Appeal’s decision, see Lancaster’s Wrongful Dismissal E-Bulletin, November 30, 2006, Issue No. 166. 

Court of Appeal decision: http://www.lancasterhouse.com/decisions/2006/sep/YCA-Evans.pdf