When a scandal-ridden employee has to go

When one employee’s poor judgment can become a global sensation, companies need a plan to fire bad apples

Illustration of Bankers Box filled with stuff

(Illustration by Patrick George)

On a Tuesday morning in May, word came in to Hydro One CEO Carmine Marcello: There was an issue. An employee had vaulted himself to worldwide infamy when his weekend behaviour was captured on video and posted online; people furious with his conduct had figured out where he worked. The company was inundated with outraged calls and critical comments on social media.

Marcello called a meeting. About a half-dozen members of Hydro One’s senior team huddled around the long, rectangular table in the executive committee boardroom on the eighth floor of their downtown Toronto office. And they began to hash out what they were going to do about it.

The CEO, who took over the top spot in January 2013, had heard about the incident on the radio that morning as he drove to work, unaware that it would have anything to do with him or the company where he’s worked for 28 years. A Toronto TV reporter, Shauna Hunt, had been covering a soccer match the previous Sunday when a man weaved in front of her camera and uttered “F— her right in the p—.” While he vanished into the crowd, Hunt wheeled around to confront a sniggering group of men hovering nearby. It didn’t take long for video of the confrontation to go viral; web sleuths quickly identified one of the men so triumphantly exulting the hilarity of hurling sexual obscenities into journalists’ microphones as Shawn Simoes, an assistant network engineer at Hydro One. Suddenly, the company was defending itself not for outages or billing errors, but for the off-duty behaviour of an employee.

“Between everyone in the room, there was no shortage of analytical thinking and no shortage of conflicting advice,” Marcello says of his quickly convened war room. While there was a consensus that the behaviour was not appropriate, the executives debated whether the company’s code of conduct was broad enough to cover off-work incidents like this. The labour relations representative was certain Simoes, a union member, would grieve a dismissal. But Marcello was adamant that the company’s widely circulated “core values” statement applied. Ignoring the situation or stalling would undermine those values. “It was very clear that this was not the kind of behaviour we can condone in any way,” says Marcello. “And we made the call.”

Simoes was sacked.

The swift termination sparked a slew of comments about the legality and fairness of Hydro One’s move: Can an employee be fired for behaviour that takes place outside of the workplace? Should he be? “If the employer wants someone to abide by the corporate code of conduct 24 hours per day and 7 days per week then they should pay for that much ‘work,’” wrote one online commenter.

But the advent of technology has heralded in a complicated new world in which the reputations of not only individuals but billion-dollar companies can be destroyed in a matter of hours. “Employers are watching more closely—and canning employees that make them look bad. It’s the reality,” says Jana Seijts, a lecturer in management communication at the Ivey Business School. While many may recoil in horror at the ability of corporations to wade into their employees’ private lives, this new reality creates challenges for bosses as well. Be too quick to fire and you look like Big Brother; be too slow and you risk condoning bad behaviour.

Simoes is far from the first employee to run afoul of bosses for things done off the clock. Another man defending the remarks alongside Simoes was identified as an employee at Cognex Corp. in Toronto. The company wouldn’t confirm his name but released a statement that said the views expressed were “totally inconsistent with Cognex’s values” and that it would be addressing its concerns about his behaviour.

Just a few days after Simoes’s transgression, a man working for Transcontinental taunted a comedian with sexually explicit remarks as she performed at an annual industry awards gala. He has been suspended as his employer investigates. Research in Motion—now BlackBerry—sacked two employees who created such a drunken ruckus aboard a flight that they forced an emergency landing. Retailer Mr. Big & Tall Menswear fired an employee for posting mocking comments about 15-year-old Amanda Todd, who committed suicide in 2012 after being bullied.

“I’ve been talking about this issue of off-duty conduct, and especially social media, for years now,” says Stuart Rudner, a founding partner at the law firm Rudner MacDonald LLP that specializes in employment law. “We’re just seeing more and more issues arising. Hopefully, with all of the media attention it’s getting, at some point the message will get through to people.” And what is that message? “People need to assume that what they do off-duty may come back to haunt them at work.”

Companies have surprising latitude in these matters. In a non-union environment, employers can dump employees any time, for virtually any reason as long as it doesn’t violate human rights laws. The only issue is whether or not they have just cause for termination—and can thus avoid paying severance. (In a unionized workplace, employers must have just cause to fire someone or that person may be reinstated.) An employer can opt not to hire, say, employees with tattoos or piercings, and fire any employee who obtains one. It’s unlikely, though, that it could successfully make the case before a judge that such a termination was with cause unless “it was so unsightly that it damaged an executive’s ability to perform their function credibly,” says employment lawyer Howard Levitt. “But that would be a rare case.” In the case of termination without cause, the employee is generally entitled to notice or some sort of severance package. It’s most frequently applied during actions such as layoffs or downsizing, but can also be used in the event that an employer isn’t happy with off-the-clock behaviour, or even appearance.

Termination with cause is a harsher measure, often referred to as the “capital punishment of employment law” and means employees aren’t entitled to any notice or payment in lieu of notice. An employee’s conduct must be sufficiently awful to warrant it. “The way I usually explain it to people is: if your conduct has an impact on the employment relationship, or upon your employer, then it can lead to discipline or dismissal with cause,” says Rudner. “So if it’s the employment relationship, that might mean it impacts your relationship with your supervisors or your colleagues. If it impacts your employer, that typically would mean damaging your employer’s reputation.” And it doesn’t necessarily have to involve damaging a company’s reputation in a material way; in some cases, bad publicity and its inherent potential damage is sufficient to warrant just cause.

Take, for example, a 2005 case that surprised many in the employment law field. Three years earlier, Linamar Corp. fired a supervisor who had been swept up in a cross-border child pornography sting and subsequently pleaded guilty to possession charges. The charges were reported widely in the media in Guelph, Ont., a small city where Linamar is a major employer. When the supervisor sued for wrongful dismissal, Linamar argued that the supervisor had violated his duty to protect the company’s interests through his involvement in child pornography, despite the fact that it was done on his own time. The Ontario Superior Court of Justice accepted the argument, adding that Linamar was entitled to take reasonable steps to protect its reputation.

This is where technology has changed the game so drastically—employers, and everyone else, are far more likely to find out about employees’ off-duty behaviour or comments, and the behaviour or comments are far more likely to damage a company’s reputation. A case in point: 22-year-old carpenter Connor Mcilvenna was fired by his employer, Rite Tech Construction, after posting positive comments about the 2011 Stanley Cup riots online. The company believed his comments damaged its reputation—by the next morning, Rite Tech’s owner had received about a hundred emails about the comments.

In the case of Hydro One, a month after Simoes issued his profanity-laced declaration of support for what’s become known as #FHRITP, a quick Google search for “Hydro One” still brought up the incident within the first 20 hits. Twenty years ago, it’s unlikely anyone beyond immediate bystanders would ever have known about his remarks. “The reality is that you do carry the image of your organization, both positive and negative, with you. Every employee has a way of impacting it either way,” says human resources consultant Gerlinde Herrmann, president and founder of the Herrmann Group.

Most experts recommend conducting a thorough investigation into incidents before coming to a decision about disciplining or terminating an employee. Or, better yet, don’t let it get to that point. Employment lawyer J. Geoffrey Howard says he just finished work on an employee handbook for a medium-sized company. Given the recent furor over off-duty conduct, it opted to add a section on conduct outside the workplace, making it clear that behaviour that brings the company into disrepute could result in discipline. It’s a good idea to have a code of conduct or policies that detail what’s expected, says Howard, a partner at Vancouver law firm Gowlings. Herrmann suggests executives consider what their corporate values are and how clearly they’ve been communicated in the workplace. “It’s not a one-time deal, it’s a continual deal. It’s the reinforcement that’s really critical,” she says. “It’s not just a matter of, ‘I’m going to get sued if I don’t do these things.’ It’s a matter of what you stand for as a company. And people will make choices on who they purchase from or use based on some of these.”

That said, companies need to stop worrying about avoiding public relations disasters and start focusing on educating employees on acceptable, inclusive behaviour, says Blaine Donais, president of the Toronto-headquartered Workplace Fairness Institute. “We’re missing some real fundamentals about diversity training, basic stuff about equality,” says Donais. “That goes much deeper than regulating behaviour. Mostly, attention has been on, ‘Can we fire somebody, how do we do that, can we protect ourselves and protect our brand?’ The best way to protect your brand is to promote the right kind of ideas about people, about equality and human rights and inclusiveness.”

He suggests companies could focus on spreading positive social media messages on topics such as gender equality. Orientation sessions for new employees should include candid discussions about inclusiveness, equity and diversity—and those conversations should remain ongoing. And leadership must genuinely embrace those values. “Perhaps for organizations to take this seriously, it should be a part of their performance measures,” says Donais.

Hydro One, in the wake of its announcement that it was firing Simoes, received backlash from critics who felt the termination was too harsh. “I didn’t expect it to spawn the type of debate that it [has] and, quite frankly, I wasn’t out there to make any sort of social statement,” says Marcello. Despite some negative response, he still feels they made the right call. “I’m not going to pretend to suggest that people are unanimously agreeing with our actions,” says Marcello. “But I think what it says is, ‘This is the standard that we want to hold ourselves to.’”

In a traditionally male-dominated industry, Hydro One has worked hard to foster a more diverse workplace and encourage women to enter the field, says Marcello. It had to “walk the talk” and make it clear to both other employees and the public that it wouldn’t tolerate such “beyond the pale” behaviour. “In moments like this, we are putting real, visible action that aligns with the values we have,” he says. Simoes has filed a grievance with his union and the case will go to arbitration. “That’s just the process we would go through,” says Marcello.

Marcello says the company lists its core values on a simple, business-card sized paper that’s widely circulated. It also has a comprehensive code of conduct that’s covered in training and reviewed annually with all employees. But there will be changes coming in the wake of the incident. “We’ve spawned the debate now, it’s beyond the company, but I think it’s also important that we have that conversation with all of our employees,” says Marcello. “The whole aspect of social media and how it played in this event is something we hadn’t really anticipated. We’ll make sure that piece becomes integrated into the discussion.”

If he learned anything from the incident, Marcello says, it’s that if you look at a problem from the perspective of right and wrong, the answer is clear. “You then can look at all the other analytical pieces and you realize, if you spent all your time going through all of this very detailed analysis, you’ll probably end up in the same place, but you’ll probably be there five weeks later. So I’m going to suggest the thing I’ve learned is that when it’s right, you know it, and you act on it.”