The Eerie Employment Agreement

By Melissa Nowak and Alessandro Perri

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Mary Shelley owned a successful cupcake bakery.  She was known for her “creations”.  She had lines wrapped around the block of her building with customers waiting to purchase her famous buttercream frosted cupcakes.  After a new year’s resolution, Mary decided to go vegan and take her cupcake bakery with her.

She set her sights on hiring Frank N. Stein, a renowned vegan baker, also known as the “bad boy” of the baking underworld.  In addition to solid baking credentials, Frank was wildly creative.  Patrons were so distracted by his presentation and innovative flavours that they didn’t even notice his treats were all vegan.

So, Mary contacted Frank N. Stein and they discussed what it would take to lure him away from Vampire’s Vegan Treats and be the head baker at Mary’s bakery.  Frank N. Stein set out loose terms of employment.  He needed very flexible hours, preferring to do all his baking from midnight onward.  He also needed free reign on cupcake flavours, including designs and themes, and, oddly, a monthly allowance for bolts.  Mary agreed to his terms and drafted an employment agreement reflecting Frank N. Stein’s requests.

Frank’s take over as head baker created quite a favourable buzz in the community.  Patrons came from all over Canada to taste his innovative, delicious and cruelty-free treats.  Business was booming!  However, Mary was slowly realizing that Frank N. Stein, like many creative types, was quite difficult to work with.

It started with his penchant to scare customers.  He’d bake a fake fingertip into a cupcake.  He’d hide under a tableclothed table and grab a patron’s leg while they were sampling a treat.  He’d affix a fake knife through his neck and came stumbling out of the back of the store, begging patrons for help.

When he grabbed an appraiser, who was doing a valuation on the bakery for       

some financing, tied him up and put him in the trunk of his car as a prank, Mary decided she needed to part ways with Frank N. Stein, before he permanently jeopardized her business.

So, after 3 years of baking with Frank N. Stein, she decided to terminate his employment.  She gave him the statutory payment in lieu of notice and put out an ad for another vegan baker.

Unfortunately, Frank N. Stein’s employment agreement, drafted by a baker (Mary), rather than a lawyer, did not meet the relevant employment legislation’s minimum standards.

When an employment contract does not meet the minimum statutory standards, the contract is unenforceable, and the employee is entitled to… (dun dun dun dun) … COMMON LAW NOTICE. Because of Mary’s mistake, Frank N. Stein hired a lawyer, Drake Ula, and countered with a claim for common law notice.

When her lawyer explained what common law notice is, Mary (like many employers we work with) shrieked in fear. Common law notice provides for far more notice than the statutory minimums and generally it is 1 month notice for each year of employment! Yes, you heard that right – common law notice is typically 4 FREAKY times more than the statutory minimum.

But the frightful nature of common law does not end there, because,  employees who are older, highly skilled, who work in an executive or management position or in a highly specialized job, or who were induced into their role may be entitled to even more notice than the general rule; and, unfortunately for Mary, Frank N. Stein met each of these characteristics:

• He is somehow 765 years old;
• He is a highly skilled and specialized baker who will have a difficult time finding new similar employment;
• He was in a management role as head baker; and
• Mary induced him to leave his previous employer to work for her bakery and a monthly bolt allowance.

When the dust settled, after long and painful negotiations, Mary’s nightmare became a reality. She agreed to pay Frank N. Stein – her frighteningly difficult employee – 10 MONTHS of common law notice. If that does not scare you, I don’t know what will.

Don’t let this spooky experience happen to you!  Call an employment lawyer!

The end!

For more information on employment agreements, please feel free to contact: Melissa Nowak, Senior Associate at 416.860.8028 or mnowak@houserhenry.com or Alessandro Perri, Associate at 416.860.8069 or aperri@houserhenry.com

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About HHS

Since 1934, Houser Henry & Syron LLP has provided legal services to Canadian and foreign private businesses, helping them deal with complex legal challenges to grow and to manage risk successfully. We help our clients with mergers and acquisitions, commercial real estate, reorganizations, shareholders disputes and agreements, commercial agreements, employment issues and financing. We also pride ourselves in practising in Plain English.