Introduction
When trust breaks down, dismissal may follow, even without a dollar changing hands. In Dell v Brookfield Residential (Alberta) LP, 2025 ABKB 403 (CanLII), the Alberta Court of King’s Bench dismissed a wrongful dismissal claim and upheld the employer’s decision to terminate a sales manager for cause. The Court found that multiple breaches by the employee of the employer’s clear and zero-tolerance anti-bribery and conflict of interest policies warranted immediate termination for cause.
Background: A Sales Manager, an Incentive Program, and Change Orders
Mr. Dell had worked in new home sales since 2010; first for Albi Homes, and later for Brookfield following its acquisition of Albi in 2015. At the time of his dismissal in April 2018, Mr. Dell managed Brookfield’s Riverstone Estates sales office in Calgary, with one or two sales associates reporting to him.
Brookfield launched an internal investigation after a senior executive learned at an industry event that California Closets might be offering incentives to Brookfield’s sales staff. The company’s review uncovered two change orders from April 2018 that were submitted by Mr. Dell shortly after he met with a California Closets sales representative, Mr. Henderson. These change orders removed closet shelving from Brookfield’s construction scope for two customers, allowing California Closets to install their own products after possession.
Brookfield interviewed staff, reviewed emails, and concluded that Mr. Dell had been offered and had accepted an incentive to promote California Closets to Brookfield’s customers. Brookfield concluded that this was a breach of both the conflict of interest provisions contained in the company’s Code of Conduct as well as the company’s Anti-Bribery Policy. Mr. Dell was dismissed with cause on April 24, 2018.
Mr. Dell’s Position: No Participation, No Incentive
Mr. Dell denied wrongdoing. He acknowledged that he had spoken with Mr. Henderson about California Closets and did request the closet scope removals on behalf of the two customers. However, he testified that the only incentive program ever discussed was a possible future program for condominium sales, which was a market in which he did not work. Mr. Dell insisted he never participated in any program and never received any benefit. Mr. Henderson testified in support of this version of events.
Brookfield’s Evidence: Contemporaneous Emails and Credible Testimony
Brookfield presented contemporaneous (i.e. from the time of the events in question) documentary evidence contradicting Mr. Dell’s narrative. Notably:
- California Closets’ owner, Mr. Johnson, testified that Mr. Dell had in fact been offered an incentive by Mr. Henderson.
- In response to Brookfield’s internal inquiry at the time, Mr. Johnson named Mr. Dell as someone who had been offered incentives.
- Emails between Mr. Johnson and Mr. Henderson showed Mr. Henderson naming Mr. Dell as a recipient of an incentive offer.
- One of the affected customers testified that he had not considered California Closets until Mr. Dell suggested it and that no other suppliers were proposed.
Although there was no evidence that Mr. Dell ever received any payment because of his actions, the Court found that his conduct, which included recommending California Closets and facilitating the change orders, supported a finding that Mr. Dell had been offered, and had entertained and subsequently accepted, incentives from California Closets.
The Legal Analysis: A Three-Step Framework
Justice Ho applied the three-part test from the Supreme Court of Canada’s decision in McKinley v BC Tel, 2001 SCC 38 (CanLII) and subsequent Alberta authority to determine whether Brookfield had just cause to terminate Mr. Dell’s employment.
1. Nature and Extent of the Misconduct
The Court found that Mr. Dell had participated in an incentive program, even if he had not yet received a benefit. More importantly, he failed to comply with clear obligations in the Code of Conduct and Anti-Bribery Policy to disclose relationships or circumstances that could appear to present a conflict of interest. On this point, Justice Ho wrote as follows (para. 54):
In the context of Brookfield’s particular concerns about its reputation and the efforts it made to protect its reputation including its zero tolerance approach to bribery which was specifically expressed in its policies, the failure of Mr. Dell to meet his obligations set out in the Code of Conduct to report the conflict of interest, potential conflict of interest, or circumstance that might appear to give rise to a conflict of interest was a significant violation of the Code of Conduct and put Brookfield’s reputation at risk. This is in addition to the finding I have made that Mr. Dell participated in an incentive program offered by California Closets.
2. Surrounding Circumstances
Mr. Dell was not senior management, but his position did include some managerial and supervisory responsibilities in that he supervised one or two sales associates at a Show Home. The Court noted that these employees would have looked to Mr. Dell for guidance about their own conduct as it related to adherence to Brookfield policies. Together, Mr. Dell and the one or two sales associates he supervised primarily controlled the culture at the Show Home. This included how Brookfield employees interacted with vendor representatives who visited the Show Home, and how those visits would be perceived by not only Brookfield, but also by customers and other independent third parties who might also be attending at the Show Home.
The Court found that Mr. Dell’s failure to report the actual, potential or perceived conflict of interest that arose because of Mr. Dell’s decision to entertain and subsequently accept an incentive from California Closets heightened the risk of reputational harm for a company with global operations and a strict anti-bribery stance.
3. Proportional Response
Based on a variety of factors, the Court determined that immediate dismissal, rather than progressive discipline, was a proportionate response in this case. These factors included Mr. Dell’s position of trust and leadership within the company and the fact that Mr. Dell had completed the required annual training related to Brookfield’s policies. The Court also emphasized that the employer could not be seen to condone such behaviour by not taking any action in response to Mr. Dell’s conduct, providing as follows (para. 66):
[To] have not acted on Mr. Dell’s conduct would have put Brookfield in the position of condoning Mr. Dell’s conduct. Brookfield was concerned about its reputation and implemented the Code of Conduct and Anti-Bribery Policy in an effort to curb any behaviour that might even have the appearance of bribery. Accepting Mr. Dell’s conduct in the face of the Code of Conduct and Anti-Bribery Policy would have had the effect of suggesting to employees and the public that Brookfield no longer considered the Code of Conduct and Anti-Bribery Policy to be important.
Ultimately, the Court found that Brookfield was justified in concluding that the relationship of trust had broken down beyond repair. No warning or lesser sanction was required in the circumstances.
Key Takeaways for Employers
- Policies Matter, Especially When Well-Communicated: Brookfield’s success in defending the dismissal turned largely on its clear, consistently communicated policies and annual training requirements.
- Appearance of Impropriety Can Be Enough: Even without proof of a received benefit, the appearance of a conflict, especially if not disclosed, can constitute just cause.
- Proportionality Is Contextual: While progressive discipline may be appropriate in many cases, the Court affirmed that it is not required where the misconduct fundamentally undermines the employment relationship.
Final Note
Although Mr. Dell was unsuccessful in his wrongful dismissal claim, the Court did award him over $80,000 in unpaid commissions and nearly $8,600 in vacation pay. These amounts were not awarded as damages for dismissal, but rather flowed from the specific terms of Mr. Dell’s compensation agreement.
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