RBC’s former Chief Financial Officer (CFO) of RBC, Nadine Ahn, filed a lawsuit against the Bank after she was terminated for cause. The Bank accused her of having an undisclosed romantic relationship with a subordinate (Mr. Ken Mason) and abusing her position to promote him and substantially increase his compensation. Mr. Mason was also fired.
Both Ms. Ahn and Mr. Mason have denied that a romantic relationship existed between. They maintain that they were, at all times, only friends and colleagues.
Ahn claims that she was not only wrongfully terminated for cause, but she was also not allowed to adequately defend herself during RBC’s internal investigations and that the accusations have severely harmed her reputation and her career.
Who is a Fiduciary?
Fiduciaries have a legal obligation to act in the interest of another party and are held to a higher standard of conduct. Fiduciary relationships exist where one party is particularly vulnerable to the other: a parent is a fiduciary to their child; a lawyer is a fiduciary to their client; and a controlling mind of a corporation (such as a CFO or director) is a fiduciary to the corporation.
In light of her very senior position as CFO, Ms. Ahn was no doubt a fiduciary to the Bank and therefore owed the Bank a duty to at all times act loyally, in good faith and to avoid conflicts of interest. If the allegations against her are true, a court is likely to side with RBC that it had just cause to terminate her employment.
Ultimately, the Bank bears the onus of proving its accusations against her, based on concrete evidence. Its allegations will not be taken at face value.
How does RBC’s public announcement of Ahn’s termination affect her claim?
Following Ahn’s dismissal, RBC issued a press release on its website stating that Ms. Ahn was dismissed “effective immediately”, that she contravened RBC’s Code of Conduct, and that her failure to disclose the “close personal relationship” led to preferential treatment toward that employee. The allegations were picked up by the national and international press.
If the Bank is unable to prove its allegations, the Bank can be liable for significant damages, not only for wrongful dismissal, but also for hefty punitive, bad faith and aggravated damages on account of the irreparable damage caused to her career and personal life.
Even if the allegations are true, one could argue that that the press announcement unnecessarily caused significant career damage, humiliation and emotional distress. It is one thing to take swift action in light of misconduct, it is entirely another to publicly parade the matter in the national press and in the court of public opinion.
Is a Workplace Romance Grounds for Dismissal?
A workplace romance is not in and of itself misconduct. However, in some circumstances employees may have an obligation to report the relationship to management if it poses a conflict of interest or potential conflict of interest. Such a conflict is likely to occur if one person in the relationship occupies a position of direct or indirect authority or influence vis-à-vis the other. Even if both parties have the employer’s best interests in mind, the existence of the relationship can nevertheless lead to perception of favouritism and bias.
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If you are an employer investigating the conduct of an employee or who is terminating an employee for cause, contact our lawyers to make sure that you are up to date on your obligations and potential liabilities.
If you are an employee who has been dismissed or are subject to a workplace investigation, contact our lawyers to review your rights and options.
Disclaimer: The materials above are for general information purposes only. This is not legal advice. This is not specific to any one company. This does not suggest any improper conduct on the part of a specific employer.
Authors: Jonquille Pak and Ava Clarke
Date: September 6, 2024
