Wrongful Resignation Can Prove Costly

Date: 2007
Author: Daniel A. Lublin
Publication: Metro

Resigning without giving notice puts employees in peril

Seldom do employers bother to sue their ex-employees.  But the tables are turned when a hasty resignation proves costly.
Few have heard of a lawsuit for wrongful resignation.  Once thought to be a remote claim, there are cases that have found their way to the courts in recent years and awakened the prospects of companies looking to recover damages caused by an employee who departs without giving a sufficient warning or even a good bye.
Gary Bradley’s resignation was more than untimely for his ex-employer Carleton Electric.   Offering his services for only a few weeks after he announced his resignation, Carleton Electric was left with substantial economic losses given Bradley’s hasty exit.  But when Bradley sued for unpaid wages, his ex-employer was left reeling.  Instead of simply defending the merits of Bradley’s lawsuit alone, it responded by suing him for wrongful resignation – and won.  Bradley’s failure to provide appropriate notice of his resignation proved costly; he was ordered to pay Carleton $10,000.
When the general manager and two salesmen of Sure-Grip Fasteners left, without notice, and opened a competing business a few kilometres away, Sure-Grip was left without a sales staff in southern Ontario.  To make matters worse, its former employees started to solicit orders from their former customers.  But after the trial was heard, Sure-Grip had the last laugh.  It was awarded $75,000 from the group of ex-employees for their failure to give reasonable notice of their resignations.
More recently, when a group of RBC Dominion Securities Employees left en masse to join a competing firm, their coordinated departure incensed their ex-employer.  But it also left them liable to pay damages for resigning without adequate notice.
Few employers bother to sue ex-employees for not providing enough notice of their resignation.  As these examples demonstrate, however, these lawsuits typically arise in the context of defending a claim for wrongful dismissal.  And the consequences of a successful suit against an ex-employee can be severe.
So if you are thinking about resigning, here are four legal principles to keep your career on track – and you case out of the courtroom:

  • The proper measure to calculate an employee’s duty to give notice is based on the amount of time that it would reasonably require the employer to find his or her replacement.
  • If you possess specialized skills or are contemplating leaving the employer in a vulnerable situation, your duty to give advanced notice is heightened.
  • In assessing your obligation, consider the labour market and the ability of your employer to replace you.  Easy come means easy go.
  • You may have a contractual duty to give advanced notice.  Have counsel review your employment agreement(s) with a view to determining whether any specific period of notice was agreed to and whether it must be followed.

It’s always good practice to err on the side of caution.  By doing so, you can avoid an irate ex-employer making you the next example of a wrongful resignation.