Article by: Keri L. Bennett + Adam James
Shalagin v Mercer Celgar Limited, 2022 BCSC 112
Your employee places their cellphone on the table as they sit down for the meeting, angling it slightly towards you. You wonder – is this meeting being recorded?
The ubiquity of cellphones means that HR professionals should assume all conversations with employees are being recorded. But are there any consequences for employees who secretly record conversations with colleagues? The British Columbia Supreme Court recently considered a situation where an employee covertly recorded hundreds of conversations with co-workers over the course of years prior to his termination.
Background to Termination
The plaintiff, Shalagin, was a CPA who worked as a Senior Financial Analyst with the defendant, Mercer Celgar Limited Partnership (“Mercer”). Shalagin had no written employment contract but he was bound by Mercer’s confidentiality and ethics policies.
Mercer’s confidentiality policy required that its employees not use any confidential information for any purpose other than those of the Company, not remove from the premises of the Company any confidential information, and return any confidential information after termination.
Shalagin had received several promotions over the years. However, the relationship soured when Shalagin shared concerns with his supervisor about Mercer’s 2019 bonus calculations. The supervisor suspected Shalagin somehow knew about the bonus amounts ahead of the planned announcement.
In his communications, Shalagin implied that he was willing to litigate the matter if no resolution could be found. Based on this threat of litigation, Mercer decided to terminate his employment without cause.
After termination, Shalagin filed complaints with the Employment Standards and the Human Rights Tribunals, and launched a civil claim for wrongful dismissal. Shalagin alleged he had been terminated as a reprisal for raising bonus concerns and that his supervisor had been dishonest with him about his 2019 bonus.
During the discovery process, Shalagin disclosed that during his employment he had made hundreds of secret recordings of conversations with other Mercer employees, both in one-on-one and group meetings. Shalagin explained that, initially, his recordings were designed to help him learn English. He further explained that he did not ask permission to make these recordings because it was not illegal, although he was aware that “people would feel uncomfortable if they knew” they were being recorded. The content of the recordings covered a wide range of topics, and in one case included a colleague’s disclosure of sensitive family information.
Mercer amended its pleadings to allege that Shalagin’s covert recordings constituted after-acquired cause for termination.
The question at trial was whether there was cause for Shalagin’s termination. Misconduct discovered post-termination may constitute just cause, however the court must still determine whether the employee’s alleged misconduct “was something a reasonable employer could not be expected to overlook, having regard to the nature and circumstances of his employment.”
Trial Judge Decision
The trial judge noted that although it is lawful to record conversations so long as one party (the recorder) consents, “legality is not the sole barometer. The question is whether the employee’s actions fundamentally ruptured the relationship…”
Based on the case law, the court found that “surreptitious recording can cause material damage to the relationship of trust between employee and employer.” In assessing the impact of the recordings on the employment relationship, the trial judge considered several mitigating and aggravating factors.
Overall, Shalagin attempted to justify the recordings as a means of protecting himself from alleged discrimination and under-compensation.
Shalagin himself acknowledged that some of his surreptitious recordings were unethical, even if not illegal. It was particularly problematic that Shalagin recorded his colleague’s personal information, as keeping this information did not contribute to his rationale for recording, even if it had been supportable.
While Shalagin was not a fiduciary, the judge found that employees in positions of high accountability should follow their respective professional standards. Shalagin breached the CPA Code of Conduct as well as his confidentiality and privacy obligations to Mercer.
The trial judge found no evidence that Shalagin’s fears of discrimination were justified, emphasizing that “[t]he plaintiff cannot invoke an irrational concern to support the reasonableness of surreptitious recordings.”
As for the bonus calculation issue, Shalagin had “access to the manager in order to raise those concerns.” The judge found that an unsupported fear of under-compensation was not a reasonable basis to record conversations.
The Court acknowledged mitigating factors: Shalagin did not publish the recordings or make use of them outside of the legal proceedings and he did not make the recordings with malice. However, the sheer volume of recordings and the extended timeframe during which they were made showed this was more than a “momentary lapse of judgment.” Shalagain knew that what he was doing was wrong, at least ethically, but did it anyways.
The judge ultimately found that the recordings constituted just cause for termination.
- Even if not done illegally, surreptitious recordings may justify a just cause termination, depending on the specific facts. Because of the high threshold, employers may wish to obtain legal advice before alleging cause.
- Employers should have a clear confidentiality policy which explicitly prohibits recording conversations in the workplace.
- As soon as it comes to light that an employee has been covertly recording in the workplace, disciplinary action needs to be taken to avoid a claim that the employer condoned the practice.
Keri L. Bennett and Adam James are labour and employment lawyers at Roper Greyell LLP and practice in all areas of labour, employment and human rights law. Keri is also the firm’s Privacy and Freedom of Information lead. To obtain contact information of any other lawyer at our firm, please visit https://ropergreyell.com/our-people/
Donna Chapman-Jones is an articled student at Roper Greyell LLP. She is interested in all areas of workplace law, including employment, labour and workplace human rights law.
While every effort has been made to ensure accuracy in this update, you are urged to seek specific advice on matters of concern and not to rely solely on what is contained herein. The document is for general information purposes only and does not constitute legal advice.