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B.C. bank botches investigation

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“CIBC was cavalier, insensitive, and reckless. They forged ahead with a termination for cause based on inaccurate and incomplete information despite knowing they had a heightened responsibility to get it right.”

This is the way The Honourable Mr. Justice Wong of the British Columbia Supreme Court described the CIBC’s decision to dismiss an employee for cause after conducting a significantly flawed workplace investigation. The case was Ogden v. CIBC (2014) B.C.S.C. 285, decided in late February of this year.

Ms. Ogden, who immigrated to Canada in 2000, developed a career in the banking system as a financial advisor, and at the time of her dismissal had a portfolio of $233 million working with clients within the Chinese community.

In 2010, Ms. Ogden accepted a wire transfer of funds from China to her personal account on behalf of a client, contrary to CIBC practice, and transferred the funds to the client’s account the next day. Ms. Ogden accepted this personal transfer in order to save a house purchase for the client, and did not benefit from the transaction herself.

When this personal wire transfer was discovered six months later, CIBC appointed an investigator, a former RCMP officer, to look into the matter, after which Ms. Ogden was terminated for cause.

When Ms. Ogden challenged the cause dismissal, the BC Supreme Court highlighted various ways in which the CIBC’s decision was unjustifiable, which included the manner in which Ms. Ogden’s alleged misconduct was investigated.

The BC Supreme Court explained that the investigation was flawed for the following specific reasons:

  • The investigator failed to ask Ms. Ogden about the circumstances of the wire transfer; or inquiring whether she was aware that such a transfer was contrary to CIBC practices, which was relevant to whether she had intentionally breached CIBC rules;
  • The investigator admitted to conducting the interview in an attempt to get admissions, and  cut Ms. Ogden off  when she attempted to answer his questions;
  • Notwithstanding the length of the interview, the investigator failed to learn key facts from Ms. Ogden that explained why she did what she did;
  • The investigator did not give Ms. Ogden the opportunity to respond to the entirety of the allegations and instead assumed her evidence on these allegations;
  • The fact that Ms. Ogden`s first language was Mandarin was not taken into consideration;
  • Ms. Ogden was noticeably upset during the interview, was seven months pregnant at the time,  and initially thought the interview was in regard to another matter; and
  • The investigator provided the decision-making panel flawed information regarding the disciplinary history of Ms. Ogden.

Overall, the Court found that the CIBC was not interested in using their investigation as a fact-finding mission but rather as a means of building a case against Ms. Ogden.

In addition, the Court concluded that the CIBC knew that its findings could have a potentially devastating effect on Ms. Ogden and her career in the financial world, and as such had a higher level of responsibility to get the investigation right before making a decision that would have such an impact. The Court noted Ms. Ogden’s vulnerability at the time of her termination, as she was pregnant, and she had a husband with serious medical issues. The Court found that the CIBC did not responsibly investigate the allegations, and could therefore not substantiate that cause for dismissal existed. Moreover, the timing of the investigation was a deliberate attempt to deprive Ms. Ogden of a commission payment.

In addition for damages for pay in lieu of notice, the Court held that Ms. Ogden would be entitled to bad faith and aggravated damages, the amount of which was to be determined at trial.

The Ogden case is yet another decision in the growing body of case law which clearly demonstrates the perils of an internal investigation process that does not look fair and objective, and the extent to which judges, tribunals and arbitrators will deconstruct a workplace investigation to see if all of the elements of it are fair. Moreover, in a post-Wallace world where bad faith damages are hard to come by, the Ogden case shows the relative ease at which legal decision makers will award bad faith damages when a flawed investigation has a devastating impact on an employee.

There is one other element of this decision that is noteworthy.  In his analysis, Mr. Justice Wong relied on two previous CIBC cases that involved a flawed investigation, Francis v. CIBC  [1994] O.J. No. 2657 and Ribeiro v. CIBC [1989], 67 O.R. (2d) 385 (H.C.J.).  Having these cases on record, on a similar issue, notwithstanding their age, was obviously quite unhelpful to the bank in terms of justifying its conduct.

Janice Rubin and Parisa Nikfarjam