By Stephen Dugandzic
In Zoehner v Algo Communication Products Ltd, 2023 BCSC 224, the British Columbia Supreme Court examined the mitigation of damages following the wrongful dismissal of Doug Zoehner, a 63-year-old co-owner and former president of Algo Communication Products Ltd.
Factual Background:
• Doug Zoehner held a 44.3% share in Algo and managed its Interconnect Division, which was sold in December 2019 due to poor financial performance.
• After the sale, Doug continued to receive his $350,000 annual salary, despite having no active role post-April 2020.
• In January 2021, his brothers, Paul and Kerry, voted to terminate his employment, citing job abandonment.
Legal Issue on Mitigation:
The court addressed whether Doug failed to mitigate his damages by not seeking alternative employment after his dismissal.
Court’s Analysis and Findings:
• Justice Verhoeven acknowledged that Doug made no efforts to find new employment, effectively being in “full retirement mode.”
• However, the court emphasized that the burden was on Algo to prove that Doug could have found comparable employment had he attempted to do so.
• The court found it highly unlikely that Doug could have secured similar employment due to:
• His age (63) and proximity to retirement.
• A career exclusively at Algo, limiting his marketability.
• Health issues, including chronic back pain and upcoming vascular surgery, affecting his employability.
• Despite these factors, the court noted that Doug could have sought lower-paying or short-term work, such as consulting, to mitigate his losses.
Outcome:
• The court reduced Doug’s notice period by 20%, awarding him damages equivalent to 19.2 months of salary ($560,000) and $8,482.74 for lost benefits.
This case highlights that while employees have a duty to mitigate damages, employers must demonstrate the likelihood of alternative employment opportunities.
*Always seek legal advice. The above is for information purposes only.
Stephen Dugandzic received his Juris Doctor degree from the University of Alberta in 2013 and is Calgary-based. He previously practised with Bennett Jones LLP and Taylor Janis LLP before founding YYC Employment Law Group in 2018.