Publication

Freedom of expression and duty of loyalty to the employer: public disclosure may be justified

In principle, every employee has a duty of loyalty to his employer and cannot publicly disclose anything likely to tarnish the employer's reputation. Therefore, any employee who makes a prejudicial public statement about his employer is liable to disciplinary measures, the severity of which will depend on the seriousness of the offence.

However, this rule is not absolute, as Arbitrator Guy Dulude decided in an arbitration award of July 13, 2005 relating to some letter carriers who had disclosed certain illegal practices at Canada Post Corporation.[1]

The background

It was established before the arbitrator that, at a certain postal station, a number of letter carriers had engaged in the objectionable practice of selling part of their mail delivery routes to coworkers.

Basically, letter carriers would agree to do part of other letter carriers' daily work in addition to their own work load for a $20.00 fee. In the course of a week, a letter carrier could thus receive an additional $100.00 tax-free.

The letter carriers had effectively created an organized subcontracting system, beginning with a small group of letter carriers, which slowly grew and ultimately revolved around one or two individuals in particular who would put carriers wishing to buy and sell portions of routes in touch with each other.

This system was harmful for two reasons. First, this kind of moonlighting practice obviously ran counter to the mission of Canadian Post Corporation, a Crown corporation, which could not tolerate a flagrant violation of the tax laws by its own employees.

Second, the system compromised the quality of the mail delivery service. It was demonstrated that the additional load assumed by certain letter carriers resulted in negligent acts or delays, even in the destruction of certain fliers, which were thrown away rather than delivered.

The disclosure

Three letter carriers had reported this illegal practice to their superiors. The employer took tentative steps that did not end the illegal practice; the offenders just became more discreet. Furthermore, two of the informers had been identified by their coworkers and suffered various reprisals, ranging from mere taunts to actual threats.

That is why the three letter carriers who had protested against the practice decided to disclose it publicly by giving interviews on television (Radio-Canada) and on the radio (Radio-Canada and CKAC-AM). The interviews had significant repercussions and were commented on extensively in the press. The employer considered that the three employees had breached their duty of loyalty and decided to dismiss one of them, while the other two were suspended for ten days, given their perfect disciplinary record and their considerable seniority.

The principles

After reviewing the case law, the arbitrator acknowledged that an employee has a duty of loyalty to his employer. An employee cannot rely on his freedom of expression to make public statements that may be prejudicial to his employer. However, in exceptional cases, an employee does have the right to make a public disclosure, which may be exercised in the following circumstances:

[Translation]

1. The right may be exercised only exceptionally, as an emergency solution and as a last resort once the employee has exhausted all other corrective measures available to him within the organization;

2. When doing so, the employee must act in good faith and must be able to justify his behaviour with serious reasons that can be objectively defended;

3. The magnitude of his public intervention, to the extent that he was able to anticipate it and if it was under his control, must not be out of line with the underlying purpose;

4. The duty of loyalty remains nevertheless inasmuch as the employee is still bound to disclose only the facts that are relevant or necessary after carefully verifying their accuracy with the best available means;

5. If the informer has taken the above precautions, he can be held responsible only for his own statements and any comments that his statements could be reasonably anticipated to cause those who reported them to make; however, he cannot be held responsible for the sensationalism created by the media for a specific purpose such as audience rating, nor can he be held responsible for misinterpretations or exaggerations and unduly suggestive comments by those involved.

(pp. 35-36)

Weighing the evidence

The arbitrator concluded that all of the facts disclosed by the complainants had been proven and not contradicted. The complainants had tried in vain to alert their superiors; they had even appealed to the office of the President. The arbitrator was thus of the opinion that the employees were justified in publicly disclosing the illegal situation:

[Translation]

The background of the case merely justifies the complainants' group effort, the main purpose of which was certainly not to publicly denounce the employer, but rather to correct a practice that was highly objectionable in every sense and caused them serious prejudice, and to end a clearly unhealthy and unbearable work environment. It was inevitable that, in large part, the blame would indirectly rebound on the employer, given that his intervention was insufficient.

Such disclosures have proven to be well founded, have been made in accordance with the criteria established, in connection with both public and private interests, have been expressed in direct and straightforward comments, which were, however, not excessive and within perfectly valid and legitimate limits.

(p. 46)

The arbitrator also found that the employer had violated Article 2087 of the Civil Code of Québec, by failing to take appropriate action to protect the health, safety and dignity of its employees. The employer should have taken steps to protect those who reported the illegal activity. The arbitrator thus cancelled the disciplinary measures imposed upon the three employees.

Conclusion

The conclusion that emerges from this case is that employers must be aware of their obligation to react when an employee reports an illegal activity. The employer cannot merely assert that its employees' duty of loyalty to the employer requires them to keep silent. If the employer refuses to take the necessary measures to rectify the illegal situation, it runs the risk that the situation will be disclosed publicly, which could have a negative impact on the reputation of its business.

The purpose of this document is to provide information as to developments in the law. It does not contain a full analysis of the law nor does it constitute an opinion of Ogilvy Renault LLP or any member of the firm on the points of law discussed.

For further information, please contact one of the following lawyers:

Montréal

Pierre Pronovost (514) 847-4485
ppronovost@ogilvyrenault.com

Manon Savard (514) 847-4520
msavard@ogilvyrenault.com

Québec

Jean Houle (418) 640-5036
jhoule@ogilvyrenault.com

Jocelyn F. Rancourt (418) 640-5003
jrancourt@ogilvyrenault.com

[1]. Société canadienne des postes and Syndicat des travailleurs et travailleuses des postes, D.T.E. 2005T-692 (arbitration award rendered by Arbitrator Guy Dulude on July 13, 2005).

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