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Employers will almost always bear the costly burden of “flaws” in an employment contract, regardless of the intentions and even relative sophistication of the parties.

This was the outcome in the case of Steve Livshin, who successfully sued The Clinic Network Canada Inc. (TCN) on the basis that his termination provision violated the Employment Standards Act (the “ESA”). The wrinkle, in this case, is that the employment agreement was negotiated between parties — sophisticated business people — represented by counsel in both the share purchase transaction through which TCN acquired Livshin’s medical practice and the ensuing employment agreement Livshin signed.

Briefly, Livshin was an employee with a medical degree, and an abundance of experience in the health-care industry who had founded a practice. His company was acquired by The Clinic Network Canada Inc. (TCN), a healthcare company owning and operating several pain and cannabis clinics across Canada.

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As part of this acquisition, Livshin agreed to stay on as an employee of TCN on a fixed-term contract for three years. Unfortunately, the employment relationship was short-lived due to the economic impact of the COVID-19 pandemic. Livshin was terminated.

Just one month before Livshin’s case, an employer in another case had successfully argued that the imbalance of power that typically exists between employees and employers did not exist between sophisticated parties who had obtained legal...

Read Full Story: https://financialpost.com/fp-work/howard-levitt-why-employers-almost-always-b...