Calvin Clarke has won his constructive dismissal suit against the Chronicle Herald.
Justice Suzanne Hood has ruled that the Herald must pay Clarke $77,761.87, which is the equivalent of 16 months’ pay ($103,616) minus money Clarke owed the the Herald and income Clarke earned at other jobs after he quit the Herald. Additionally, Hood ordered the Herald to pay two per cent interest and Clarke’s legal costs.
“Constructive dismissal” is when an employer changes an employee’s pay and/work conditions such that the employee finds the job untenable.
I reported on the trial and Clarke’s claim in November:
On the stand, Clarke described himself as “a Herald man.” His father worked for the Herald for 35 years, rising from “runner to sales to national advertising and flyer distribution manager,” said Clarke.
Like his father before him, Calvin Clarke worked his way up the corporate ladder. He started at the Herald in 1994, when he was completing a business degree at SMU. After he graduated, he was hired full-time. He told the court that as a junior account executive, he doubled his sales from $250,000 annually to $500,000 annually, and was promoted to senior account executive, where he often had sales exceeding a million dollars annually.
Clarke explained that he was paid a base salary of $24,000, but then a commission based on the previous year’s sales. He would be given a sales target of 10 percent over the previous year, and if he met it, was paid a five per cent commission. If he failed to meet it, he was paid three and a half percent. Because the state of the economy varied, he sometimes met his targets, and sometimes didn’t. In 2011, he was paid $95,082; in 2012, $73,883; but then in 2013 he was back up to $93,330.
In recent years, Clarke was bringing in over a million dollars annually in sales revenue to the Herald.
Clarke took a two-month medical leave in 2015, and returned to work on March 2. That day, his boss, Alex Liot, the VP of Sales, told Clarke that he was being moved to a new position called a “business development specialist.”
Liot told Clarke that the new position would be split, with 75 per cent of his time dedicated to Bounty, and 25 per cent to Headline, where he was to develop a new business line in sports apparel….
But he soon found the proposed job was an impossible duty.
In 2014, Clarke said, Bounty had total sales of $4.103 million dollars, and the company was setting a 2015 target at $4.473 million. Clarke was to take over the accounts that had been in the control of Bounty president Aubrey Graham. In 2014, those accounts brought in $1.3 million. Clarke was to increase sales for those accounts to $1.4 million, but then also bring in $200,000 in new business, for a total of $1.6 million.
The problem was, said Clarke, those accounts were a mess. One account was held by two different sales reps. The situation was so disorganized that Clarke’s first order of business was to create a list of accounts and figure out where they stood.
Bounty’s biggest account was the Chronicle Herald itself. The Herald paid Bounty $449,223 in 2013, and $612,036 in 2014. Clarke would get no commission on Herald sales, but worse yet, the big increase of sales to the Herald made Bounty look more profitable. In reality, however, those sales masked a loss of about $150,000 in non-Herald sales.
Bounty’s second largest client was Eastlink, with sales of $325,280 in 2013, and $173,567 in 2014. Mid-year in 2014, Eastlink cancelled its Bounty contract and took all its business to Queen’s Printing…
The situation at Headline was far worse, he found.
Headline Promotions had been in the swag business, but now wanted to get into sports apparel. Clarke’s job was to develop a new product line and start selling to sports teams. Headline’s total sales in 2014 were $575,000, and Clarke was to bring in $260,000 in new business through the sports apparel lines.
What he quickly found, however, was that Headline was not in a position to make sales to teams. Clarke compiled a list of every local sports team and then started cold-calling them, starting with the Sackville Flyers. The manager at the Flyers told him the team had a 30-year relationship with Sportswheels, a Sackville firm, and wasn’t about to give that up, no matter what incentives Clarke could offer.
Going through his list, Clarke found that the sports team apparel business is dominated by three major firms — Cleves, Prodigy Sport, and Sportwheels. “The incumbents are entrenched,” he said. And the bigger firms could offer incentives like related sports equipment that are unavailable to Headline.
Indicative of how badly Headline had approached the business, said Clarke, was that the company had no relationship with Adidas, one of the largest apparel wholesalers.
Wrote Hood in her decision:
Calvin Clarke prepared scenarios for his possible income in which he estimated income of $56,995 and $56,505 in the first two scenarios. He projected income of $71,505 if he met the Bounty Print projections but not those for Headline Promotions. It would only be if he met all projections that his income would be $84,100, but he believed the target projections were unattainable and his income would be lower than $56,000 or $57,000
Clarke attempted to negotiate a higher base salary from the Herald, but was not satisfied with the meagre counter-offer, so quit and filed suit.
The Herald did not hire anyone else to fill the “business development specialist” position Clarke had left.
I detailed the Herald’s defence here, and recounted the testimony of Liot and Nancy Cook, who holds the title of “chief people officer” at Saltwire. Hood dispensed with Liot’s and Cook’s testimony, in essence finding their testimony irrelevant.
Hood’s decision is published here.