Dismissal Without Cause (Age 50 to 65)(WDD-Professional)

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Date Retrieved:	2025-04-01
CLNP Page ID:	2481
Page Categories:	[WDD-Professional]
Citation:	Dismissal Without Cause (Age 50 to 65)(WDD-Professional), CLNP 2481, <>, retrieved on 2025-04-01
Editor:	Sharvey
Last Updated:	2025/03/05

Marshall v. Watson Wyatt & Co., 2002 CanLII 13354 (ON CA)

The plaintiff was a communications consultant. She accepted the defendant's offer of employment over a competing offer when told that she would be offered an equity position and a future role internationally. She was given the title of Director of Organizational Communications Practice Canada. Her employment was terminated a year later. She brought an action for damages for wrongful dismissal. The defendant alleged cause for dismissal, but by the time of the trial no longer disputed its liability to the plaintiff. Damages alone were in issue. The case was tried before a jury. The jury found that the plaintiff was entitled to damages equivalent to 12 months' notice, consisting of 9 months' reasonable notice and a further 3 months for bad faith conduct in the way the defendant dismissed her. The jury also awarded punitive damages of $75,000. The defendant appealed.

Held, the appeal should be allowed in part.

...

[4] Ms. Marshall is a communications consultant. Before being hired by Watson Wyatt, she worked for Towers Perrin for eight years as a senior consultant. By the summer of 1994, she was "up for partnership" with Towers Perrin. Around the same time, a search firm acting for Watson Wyatt asked to meet with her. She declined.

[5] Later in the fall of 1994, she decided not to pursue a partnership in Towers Perrin. Instead, she called the search firm and asked to meet with its representatives and their client. By mid-November 1994, she had met with three senior employees of Watson Wyatt, all of whom indicated a desire to hire her. She was also being pursued by another company, the Juran Institute, which orally offered her a position. On November 16, 1994, Towers Perrin terminated her employment.

[6] Ms. Marshall then had to decide between the Juran Institute and Watson Wyatt. The Juran offer was for $140,000 base salary, a percentage of sales, and "other perks". She disclosed this offer to Ian Durrell, Watson Wyatt's Director for Canada and managing consultant for its Toronto office, who said he would offer her an equity position, which Juran had not done, and a future role internationally. He said that Watson Wyatt's new business direction would bring her practice area to the forefront of the company's business. She decided to accept Watson Wyatt's offer.

[7] On December 22, 1994, Ms. Marshall and Watson Wyatt signed two letter agreements -- one dated December 8, 1994 and the other dated December 9, 1994 -- setting out the basic terms of her employment. Her claim is based on these two letters and a few other terms that she says were agreed to orally.

[8] Ms. Marshall was given the title of Director of Organizational Communications Practice Canada. She was told to focus on setting up the Toronto office but was also given responsibility for Watson Wyatt's Montreal office, and later for the company's offices in Western Canada.

[9] For the first stage of her employment, which the jury found covered the 18-month period January 1, 1995 to June 30, 1996, Ms. Marshall was to be paid a base salary of $120,000 "plus 10 [per cent] of revenue generated directly and indirectly" through her efforts and earned during the period. Under the letter agreements, this 10 per cent of revenue was called Ms. Marshall's "compensable revenue". For the next stage of her employment, covering the period July 1, 1996 to June 30, 1997, Ms. Marshall was to be paid a minimum base salary of $140,000, which could be increased depending on her compensable revenue (or "initial year revenues") during the previous 18 months, plus a discretionary bonus up to a maximum of 40 per cent of her base salary.

[10] Ms. Marshall started working for Watson Wyatt at the beginning of January 1995. From mid-October to early December 1995, she was away from the office with pneumonia. She then took three weeks' vacation, returning to the office on January 8, 1996. She was fired that day.

[11] By the time of trial, Watson Wyatt no longer disputed its liability to Ms. Marshall. Damages alone were in issue. The jury assessed Ms. Marshall's damages by answering 14 questions. They found that Watson Wyatt owed Ms. Marshall $143,165.82 in compensable revenue for the first stage of her employment, $298,049 on account of her dismissal, which included a bonus of $45,000, and $75,000 in punitive damages for a total award of $516,214.82. The amount awarded for compensable revenue earned before she was fired is not in issue in this appeal. ...

[50] Even if the Commission's view satisfies the independent actionable wrong requirement, and I doubt whether it does, a punitive damages award in this case serves no rational purpose. Ms. Marshall was awarded generous compensation equal to nine months' notice. That nine months was increased by three months because of the jury's finding that the way Watson Wyatt dismissed Ms. Marshall was unfair or in bad faith. Undoubtedly the jury relied on much the same evidence for both extending the notice period by three months and awarding punitive damages. In my view, the overall compensatory award of 12 months' notice -- which included a base salary of $112,500 for the second six months and a maximum bonus of $45,000 -- was more than adequate to express the jury's disapproval of Watson Wyatt's conduct and to deter similar conduct in the future. I would therefore set aside the award of $75,000 in punitive damages.

D. Disposition

[51] I would allow the appeal in part by setting aside the punitive damages award ($75,000) and directing the trial of an issue on the compensable revenue awarded Ms. Marshall in connection with the Montreal office ($46,330.30). I would therefore reduce Ms. Marshall's damages from $516,214.82 to $394,884.52. Correspondingly, I would reduce the amount of damages on which interest is to be paid from $441,214.82 to $394,884.52.

[52] Before addressing costs, I would give both parties an opportunity to make submissions in writing on both the costs of the trial and of the appeal. These submissions should be delivered within 30 days of the release of the court's reasons.

Appeal allowed in part.