Law Times - sample

Law Times • OcTOber 30, 2017 Page 7 www.lawtimesnews.com Know your rights at the border BY CYNDEE TODGHAM CHERNIAK T echnology is wonderful. Laptop comput- ers are getting lighter. Storage capacity on laptop computers, smartphones, USB keys and other electronic devices are up in the terabytes. What this means is that everyone, including lawyers, can travel with vast amounts of personal data and client documents dating back to or before the pur- chase of an electronic device. From one electronic device, you (or the Canada Bor- der Services Agency), U.S. Customs and Border Protec- tion and other border officers can access every email, text message, document, bank statement, health report, credit card statement, invoice, photo, contact, calendar entry, call history, voicemail message, to-do notation, book, magazine, internet search, app data, Facebook post, Twitter post, Netf lix download history, stored password and other information stored on your elec- tronic device. If your electronic device has GPS, the geo-locations of your travels can be downloaded. Your electronic de- vice may be cloud enabled and may synchronize with or open the door to data stored elsewhere (that is not on the electronic device with which you are travelling). Certain deleted data can be retrieved with relative ease. A single handheld electronic device or laptop can store more than what used to be in luggage. The Cus- toms Act is outdated and has not been modernized to ref lect modern technology. Law-abiding citizens do not even think about the information on their electronic devices until the CBSA asks them to write their pass- word down on a piece of paper and they disappear with their electronic device into a back room without them. As the CBSA officer walks away with all of your person- al information, you finally ask the important question, "Can they do that?" And then the door shuts and you have no opportu- nity to stop the intrusive and invasive search of your electronic device. If you travel frequently across borders, you may have questions. For example, what is the CBSA's policy (Operational Bulletin PRG-2015-31) concerning examinations of electronic devices? There is a policy that has not been posted on the CBSA website but that I have obtained that says the CBSA has the authority to search electronic devices and may look at any email, document, text, pho- to, etc. as it considers electronic documents to be goods. You may also ask yourself what the CBSA's policy is concerning examinations of solicitor-client privi- lege materials. There is also a short policy (Operational Bulletin PRG-2014-07) that has not been posted on the CBSA website but that I have obtained that says CBSA officers will normally respect solicitor-client privilege but will make decisions on a case-by-case, document- by-document basis. Other questions may focus on if the CBSA respects solicitor-client privilege. For that, the answer is maybe. Operational Bulletin PRG-2014-07 states that "only documents . . . marked 'Solicitor/Client Privilege' or are addressed to/from a law firm, or a lawyer's office, or where the documents are carried by a lawyer or no- tary in physical or electronic format and solicitor-client privilege is claimed or asserted . . . are potentially privi- leged." The CBSA officer adjudicates whether privilege applies. Another important area for scrutiny is if there is there a procedure to have someone else review solicitor- client privileged documents. The answer is yes, but you will have to deposit your electronic device in a sealed evidence bag and leave your electronic device with the CBSA for an indefinite period of time. Operational Bul- letin PRG-2014-07 does not set out the procedure. There must be another CBSA officer to observe the process and sign a completed IMM 5242B form and the elec- tronic device must be placed in a sealed evidence bag. This includes questions around whether the CBSA should access emails and texts that arrive while the CBSA is examining your smartphone or laptop. The answer is no. Operational Bulletin PRG-2015-31 requires that the CBSA set your electronic device to "airplane mode." It also includes queries about how to proceed if the CBSA asks for the password to webmail or to ac- cess documents stored in the cloud. The answer is that the CBSA should only examine goods in your possession at the time you cross the border. But what happens at the border may be different from what is in the bulletin. You may wonder what to do if the CBSA asks you to access bank records and credit card statements by going into websites. The CBSA should only examine goods in your possession at the time you cross the border, not go on a fishing expedition through your intimate and per- sonal information. Lastly, one may wonder if the CBSA needs to have reasonable suspicion before examining an electronic device. The answer, in my opinion, is that currently the CBSA just asks to examine the device and does not have to state the reason for asking or state what it will be looking for. The threshold for such examinations is significantly lower than what the police require to ob- tain a search warrant. The CBSA does not need a search warrant to examine your electronic device. This also extends to your password. Martin Bolduc, vice president of the Programs Branch of the CBSA, testified before the House of Com- mons Standing Committee on Access to Information, Privacy and Ethics in September that the CBSA may arrest a person who does not provide a password when requested. The CBSA's position is that s. 13 of the Cus- toms Act requires that a traveller answer all questions and, therefore, if the CBSA officer asks for a password, it must be provided. In his testimony, Bolduc was very clear — the CBSA takes the position it has the authority to look at any- thing you have on your electronic devices. If you do not want the CBSA to look at specific information, do not have it on your electronic devices. So, ask the right questions before you travel with your electronic devices. LT uCyndee Todgham Cherniak is a customs lawyer at LexSage Professional Corporation, a boutique international trade and sales tax law firm. Severability clauses in employment contracts BY NIKOLAY Y. CHSHERBININ I n general, courts interpret employment contracts differently from commercial contracts, mainly because of unequal bargaining power between employers and employees and the importance of em- ployment in a person's life. Some employment contracts include severability clauses, which are designed to reform an illegal term by bringing it with- in the legally tolerable range. In North v. Metaswitch Networks Corporation, 2017 ONCA 790, the Court of Appeal for Ontario considered a vexing issue of whether a severability clause can be used to repair the illegality in the termination clause. The court unequivocally resolved that a severability clause cannot have any effect on clauses that have been voided by the Employment Standards Act, 2000. The court also clarified that whenever a termination clause violates the ESA, the severability clause is not void but, rather, it is inoperative because there is nothing to which it can be applied. In North, North's employment with Metaswitch Networks Corporation was governed by a written employment con- tract, which included termination and sev- erability clauses. The former purported to limit North's entitlements at dismissal to the statutory minimums contemplated by the ESA, while the latter intended to sever any provision that a court would find to be illegal and enforce the remainder of the contract. Following his dismissal, North took a position that the termination clause was contrary to s. 5(1) of the ESA because it provided that payments in lieu of notice are to be based on his "base sal- ary" only, whereas his earn- ings consisted of salary plus commissions. By excluding commissions, Metaswitch contravened the employment standards set out in ss. 60 and 5(1) of the ESA. Section 60 prohibits employers from re- ducing regular wages during a statutory notice period, while s. 5(1) forbids them from con- tracting out of that employment standard. The term "regular wages" includes wages that have been held to include commis- sions. Ultimately, North asserted that he was entitled to receive termination com- pensation based on common law. Metaswitch's position was that if the termination clause was illegal, then the of- fending sentence should be excised from the contract using the severability clause. The parties sought to have the issue of the applicability and effect of the sever- ability clause determined by the court on an application under Rule 14 of the Rules of Civil Procedure, where the determina- tion of rights depends on the interpreta- tion of a contract. The application judge accepted that the sentence in the termi- nation clause had the effect of excluding payment of commission to which North was entitled and, therefore, contravened the ESA. In interpreting and giving effect to the severability clause, the application judge adopted the court's reasoning in Oudin v. Centre Francophone de To- ronto Inc., 2015 ONSC 6494 and excised the offending sentence but left the rest of the termination clause to be enforced. On appeal, the court found the application judge erred in law by merely sever- ing the offending sentence rather than voiding the entire termination clause. It reaf- firmed, relying on the Supreme Court of Canada's judgment in Machtinger v. HOJ Industries Ltd., [1992] 1 S.C.R. 986 and its recent judgment in Wood v. Fred Deeley Imports Ltd., 2017 ONCA 158 that where a termination clause contracts out of even one employment standard, a court is to find the entire termination clause to be void and unenforceable. This interpreta- tion encourages employers to draft con- tracts that comply with the minimum re- quirements of the ESA, and it extends pro- tection to as many employees as possible. In North and Oudin, the motion judges engaged in the gap-filling exercise of an employment contract that contained a perceived lacuna that needed modifica- tion. Since severability turns on the intent of the parties, reliance on a severability clause to fill a gap that arises from the ex- cision of the illegal term not only mimics the parties' bargain but dictates the sub- stituted term closest to the hypothetical bargain. Therefore, the courts' reliance on the severability clause effectively rewrites or reads down the offending provision, thereby producing the deleterious effect the Supreme Court of Canada warned against in Machtinger — employers will be incentivized to contract out of the ESA by including a severability clause to save the illegal term in the event that an em- ployee has means to challenge the contract in court. In addition, this gap-filling exercise is punitive, because it effectively elimi- nates an employee's right to benefit from the contractual interpretation that gives the greater benefit to them. North is an important decision. By eclipsing Oudin, it clarified the law and solidified the rule that contractual terms that are voided by the ESA cannot be interpreted through the application of a severability clause to provide for the minimum standard im- posed by the ESA. North serves as yet an- other reminder that the enforceability of the termination clause turns on its word- ing, which the courts will scrupulously dissect in order to ensure the clause com- plies with the ESA. If it fails do so, then the employee would be entitled to reasonable notice of termination. LT uNikolay Chsherbinin is an employment and immigration lawyer and author of The Law of Inducement in Canadian Employment Law. He can be reached at 416-907-2587 or by visiting nclaw.ca. u SPEAKER'S CORNER COMMENT Labour Pains Nikolay Y. Chsherbinin

• Cover