{"id":3367,"date":"2018-04-03T07:54:04","date_gmt":"2018-04-03T11:54:04","guid":{"rendered":"http:\/\/business.financialpost.com\/?p=1568255"},"modified":"2018-04-03T07:54:04","modified_gmt":"2018-04-03T11:54:04","slug":"why-extra-caution-is-required-when-dismissing-a-c-suite-exec","status":"publish","type":"post","link":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/2018\/04\/03\/why-extra-caution-is-required-when-dismissing-a-c-suite-exec\/","title":{"rendered":"Why extra caution is required when dismissing a C-suite exec"},"content":{"rendered":"
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Once a CEO, often never again a CEO. Company presidents and C-suite executives all have one thing in common: their roles often come along but once in a lifetime. The silver lining \u2014 employment law continues to favour them. Such was the case of Stephen Hale.<\/p>\n

From 2007 to 2014, Hale, a 59-year-old chartered accountant from Strathey, Ont. was the highly paid president of Innova Medical Ophthalmics Inc., a medical equipment distribution company. He earned more than $300,000 annually, including benefits.<\/p>\n

In July 2014, one of the owners, Victor Spear, entered Hale\u2019s office and told him he was unhappy at work, and that either he or Hale had to go, and that it was easier to terminate Hale. He told Hale to gather his things and leave. Hale left immediately and was effectively terminated that day. <\/p>\n

Two weeks later, Innova wrote Hale, accusing him of owing Innova $130,290 in life insurance premiums that it paid on his behalf, and that it had learned he had written off $6.8 million of the company\u2019s debt without disclosing it. Innova claimed Hale had been dishonest and that it had cause to terminate his employment.<\/p>\n

When Hale sued, Innova alleged that the $6.8 million writeoff, without advising of the tax consequences, was grossly negligent and dishonest. It also alleged that Hale failed to honour an agreement with the principals of Innova, Victor and David Spear, to deduct the annual cost of two insurance policies from his compensation, thereby providing himself an unauthorized $58,000 annual increase in salary.<\/p>\n

Innova argued that it had cause to terminate Hale and also counterclaimed, seeking the repayment of the insurance premiums that Hale was allegedly required to pay back.<\/p>\n

At trial, Justice Carole J. Brown dismissed all of Innova\u2019s claims. She found Victor Spear to not be credible; that his evidence lacked candor and often seemed contrived. She found that there was no nefarious, deceitful or fraudulent attempt on the part of Hale to hide the fact that the company was paying his insurance premiums. There was no cause to terminate Hale as the court found that he did indeed disclose the $6.8 million writeoff to the owners despite the owners giving evidence that he did not. The judge found the evidence of the owners to be less than credible, finding that good corporate policy would suggest that they should have been regularly reviewing financial documentation.<\/p>\n

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