What Happened?
A CEO’s constructive dismissal victory has been reversed — with a court finding her decision to secretly build a rival company prior to her resignation established after-acquired cause.
WATCH: Constructive Dismissal — Your Rights
What You Need to Know
- In 2006, Laura Araneda is chosen to serve as President of VIC Progressive Diamond Drilling Inc. She begins using the title of Chief Executive Officer (CEO) in 2015.
- In July 2020, Araneda meets with a solicitor to incorporate a direct competitor of VIC. She reserves the domain name, opens bank accounts, arranges insurance, and sets up email addresses for the new company.
- In July 2020, Araneda redirects a recurring VIC client contract to this new company.
- Suspicious about her activities over the summer, VIC’s board moves Araneda from CEO to Chief Financial Officer (CFO) on Sept. 7, 2020.
- Instead of replying to the new president’s message about her future role, she resigns after 27 years of service and files a constructive dismissal claim.
- A trial judge rules in favour of Araneda — awarding her $115,240 in damages.
- VIC appeals the decision. The award is reversed based on the misconduct discovered and Araneda is required to pay her former employer $3,000.
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Key Takeaways
For Employees
Employees are generally allowed to consider future opportunities...
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