Aggressive litigation tactics fail employer in court

Donato was terminated about one-and-a-half years later, without cause, in January 2018. He sued Peartree for wrongful dismissal damages in excess of $3 million.

Peartree countersued Donato for more than $1.5 million claiming he breached the non-competition and non-solicitation clauses in his employment agreement when he reemployed at Sprott Private Wealth nine months after his termination. Peartree claimed, among other things, that Donato breached his fiduciary duties and used its confidential information in his reemployment with Sprott.

After a 10-day trial, Ontario Superior Court Justice Robert Centa awarded Donato wrongful dismissal damages (that worked out to just over $718,000) and dismissed Peartree’s counterclaim.

In Centra’s recent decision on costs of the trial, the court was clear that it sought to sanction Peartree’s “inappropriate behavior” in pursuing a claim against Donato for non-competition and for the very late disclosure in relevant documents.

In awarding Donato $830,761.75 in costs (more than his $718,000 award), the court stated: “PearTree conducted this litigation in an unforgiving, scorched earth, and bare-knuckle manner.”

Hindsight being what it is, Peartree, too, is surely revisiting it’s approach to employee terminations.

While the cost award and the trial loss will be a temporary sting, there are indirect and long-term impacts to an organization that elects to litigate forcefully and then roll the dice in court.

It is rarely the right time for take-down, tear-down tactics when it comes to employees. The consequences, can be dire. The stakes and the costs are getting higher.