Disingenuous Severance Cheques/Can Caregiving = a Failure to Mitigate?

Thompson v. Revolution Resource Recovery Inc., 2025 BCSC 8

In Thompson, the Plaintiff was employed for nearly 3.5 years when she was terminated without cause. In the latter part of her employment, the Plaintiff saw her role begin to change rather notably. Instead of focusing on existing clients (which was beneficial to the Plaintiff’s compensation structure) she was asked to begin focusing on new business development.

Around this time, the Plaintiff’s mother also began to suffer from rapidly progressing dementia, and the Plaintiff was forced to miss work a fair amount to care for her. Though the Defendant acknowledged the Plaintiff’s family issues, they also reminded the Plaintiff of her need to start meeting her sales quotas.

Not long after, the Defendant sent the Plaintiff a termination notice advising her that she was permanently laid off, effective immediately.

The Plaintiff brought a claim for wrongful termination and was ultimately awarded six months of pay in lieu of reasonable notice (before the mitigation deductions outlined below) and $25,000 in punitive damages (also discussed below).

One live issue in this case was the fact that the Plaintiff deposited a settlement/severance cheque after her termination. With that said, she did so after qualifying with the Defendant that she would not accept it as settlement as she felt that she was entitled to much more. This qualification satisfied the Court that in the circumstances depositing the cheque could not be deemed to be an acceptance that the cheque was sufficient payment in lieu of appropriate notice.

The Defendant also argued that the Plaintiff failed to mitigate because she turned down job offers from potential competitors without first inquiring with them about potentially waiving her non-compete and non-solicitation clauses. The Court rejected this argument finding that it was reasonable for the Plaintiff to turn down these offers. It was determined that keeping in touch with people in the industry to keep the Plaintiff in mind when her non-compete expired was enough to find that the Plaintiff took appropriate mitigation steps.

Where the Court took issue with mitigation is of interest. The Plaintiff’s award of six months’ pay in lieu of reasonable notice was reduced to five months because the Plaintiff admitted to being distracted by caring for her mother and not doing all that she might have done otherwise to find replacement work.

Finally, the Plaintiff was awarded $25,000 in punitive damages. The Court found that the Defendant sent the above-mentioned settlement cheque (with the condition that cashing it would release them from any claims) when they were well aware of the Plaintiff’s compromised financial situation due to dealing with the health of her mother. The Court found this to be reprehensible and noted that “employers should clearly be deterred from leveraging their own non-compliance with employment standards requirements to compel financially vulnerable employees to compromise their legal positions”.

Written by C.J. Galozo, Employment and Litigation Lawyer