Law Times

Page 4 September 18, 2017 • Law timeS www.lawtimesnews.com NEWS NEWS NEWS Ensure language is consistent in agreements OCA rules partner cannot bring wrongful dismissal claim BY ALEX ROBINSON Law Times T he Ontario Court of Ap- peal has upheld a find- ing that a lawyer could not bring a wrongful dismissal claim against her for- mer law firm, as she was a part- ner and not an employee. In Daniel v. Miller Can- field Paddock and Stone LLP, Windsor lawyer Julie Daniel brought an action against her former firm, Miller Canfield Paddock and Stone LLP, for constructive dismissal without notice when the firm dissolved in early 2014. She argued that she was an employee of the firm and as such was entitled to dam- ages for wrongful dismissal, but the firm argued she could not bring the action, as she was a partner. A trial judge and later the Court of Appeal sided with the firm. Lawyers say the case serves as a warning to both lawyers and law firms to make sure the na- ture of their relationship is very clear in their agreements. Law- yers say partners should also make sure they negotiate what happens on dissolution into their agreements. "The main takeaway would be to ensure the language in your agreements is consistent throughout, and that it's very clear to people at various levels how they are referred to in your agreements," says Nicole Mar- cus, a lawyer with Strosberg Sas- so Sutts LLP, who represented the firm with Myron Shulgan. "If you're elevating someone to a partnership status within the firm, [they should be] re- quired to sign the requisite part- nership agreements with the requisite language that makes it clear what level they're being ad- vanced to." The Windsor-based firm, where Daniel practiced, worked in partnership with interna- tional firm Miller Canfield Pad- dock Stone PLC from 2002 until the bigger firm pulled out of the partnership in late 2013. Some of the dissolved firm's lawyers joined Shibley Righton LLP and others created a new firm under Wilson Walker Hochberg Slopen LLP, which was the firm's original name before it merged with the PLC. Daniel, however, was not offered a comparable position at either firm. When Daniel brought her claim, the firm argued that she had become a partner when she was elevated to "salaried interna- tional principal" in 2006. In the lower court decision, Ontario Superior Court Justice Peter Hockin found that prin- cipal and partner were inter- changeable terms and that Dan- iel had participated in regular partnership meetings. He also noted that she was held out as a partner to clients, filed her tax returns as a partner and had full access to the business affairs of the firm. Marcus says the decision shows the nature of the relation- ship between the individual and the firm trumps any agreement that may have described her as an employee. "It goes to show that sub- stance will always trump form, where the nature of a relation- ship between someone working in a firm and the firm itself is one of a partnership," says Marcus. In her appeal of Hockin's de- cision, Daniel argued that the trial judge had not sufficiently considered the fact that a part- ner controlled her work and that she was dependent on the firm. She contended Hockin had failed to apply the correct test set out in a 2014 Supreme Court of Canada decision in McCormick v. Fasken Martineau DuMou- lin LLP. This test determined whether a particular workplace relationship put a B.C. lawyer in a position of vulnerability. But the Court of Appeal re- jected this argument, saying the McCormick decision was not an "all-purpose test to determine whether a person is a partner or an employee." Daniel Lublin, partner with Whitten & Lublin PC, who was not involved with the case, says the court failed to address an as- pect of McCormick that laid out a spectrum of partners that can range from equity partners or non-equity partners to partners who are just called as such for marketing purposes. "I don't know why the Court of Appeal didn't take this oppor- tunity to say listen, McCormick instructs us there is a spectrum of partnership," he says. Kimberly Alexander, a lawyer with KBA Law, who represents partners but was not involved in the case, says the question of whether a lawyer is a partner should not be the last stage of the analysis. She says that finding an individual is a partner does not necessarily mean they have no remedy. "The actual question of status is a necessary preliminary ques- tion, but it doesn't in and of itself determine what the final rights and remedies will be," Alexan- der says. She thinks the case sug- gests there is going to be contin- ued uncertainty going forward, particularly for lawyers making their way up the partnership track. She says lawyers in such circumstances should ask ques- tions and make sure they know their rights. "They will not necessarily know what bucket they are in," Alexander says. Robert Matlack, the lawyer who represented Daniel, did not respond to a request for com- ment before deadline. 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