Human Resources 101

Michael Carroll was a branch manager with Emco, a plumbing and heating supply company, for 16 years. Several employees reported to him, including Barbara Randall, an inside sales employee. In 2002, Carroll and Randall began an intimate, sexual relationship that continued for almost three years.

Throughout the relationship, Carroll was Randall’s immediate supervisor, and was responsible for reviewing her sales performance and determining her salary raises. In 2003 and 2004, he promoted Randall and gave her the highest raises in the branch. When other employees (including a regional vice-president) asked if the rumours of a sexual relationship were true, Carroll vehemently denied them.

The relationship came to an abrupt end in February, 2005. This resulted in considerable “drama” in the workplace, and affected the performance of Emco’s other employees. A short time later, Carroll spent the night with a new employee and was seen having breakfast with her the next day. This resulted in a work environment that was later described as a “soap opera” and an “elementary school”, and forced Carroll to admit to the relationships when confronted by the regional vice-president a second time.

Notably, Emco did not decide to terminate Carroll’s employment immediately, and opted instead to transfer the three employees to different sites. However, Carroll considered the transfer to be a demotion, and refused. When his employment was terminated, Carroll sued Emco for wrongful dismissal.

Following a seven day trial, the court dismissed Carroll’s claim for damages and held that he “deliberately and deceitfully” failed to reveal his relationship with Randall “for personal reasons that put him in conflict with the interests of his employer”. This conflict undermined the obligations and good faith inherent in the employment relationship.

From Coutts Pulver Fall 2006 Labour and Employment Law Report