Client Win: LED Sales VP Turns Contractor Years, Unpaid Incentive into Big Severance

Imagine working hard for years, earning commissions and bonuses, only to be left unpaid and abruptly terminated without severance. For Mark Doughty, a Sales VP at EcoPower Inc., this unfair reality became his experience — but the court ensured it didn’t end there.

Doughty provided services to EcoPower first as a contractor and later as a full-time employee, but the company failed to meet its obligations. They left him unpaid for thousands of dollars in commissions and bonuses owed under his contract. To make matters worse, when they fired him after just two months as an employee withoutout notice or severance. With the help of Toronto employment lawyer and Partner Chantel Goldsmith at Samfiru Tumarkin LLP, the court not only acknowledged his rights but also factored in his time as a contractor to award him a fair severance package. Here’s how this decision unfolded and why it matters.

The Case: Mark Doughty v. EcoPower Inc.

A Business Relationship Gone Wrong

Mark Doughty wore two hats in his relationship with EcoPower Inc., a manufacturer and distributor of LED lighting:

1. Through his company, 2604900 Ontario Inc., he provided services under a contractual agreement.
2. He later became a full-time employee of EcoPower in 2020.

At first, things seemed straightforward. Under the initial 2018 fixed-term contract, Doughty’s company provided sales services and earned commissions and bonuses. The contract appointed Doughty as Vice President, Sales, of EcoPower, offering him a monthly payment of $2,000 USD, additional payments based on sales targets, and a bonus for meeting performance milestones. Although the contract was set to expire in October 2019, it was extended until January 2020, after which Doughty transitioned to a full-time employee role with an annual salary of $75,000 CAD and three weeks of vacation.

Despite these agreements, EcoPower failed to pay over $55,000 USD owed to 2604900 Ontario Inc. for services rendered under the contract. To make matters worse, just two months after Doughty started as a full-time employee, EcoPower terminated him without severance pay. At the time of his termination in March 2020, Doughty was 61 years old and left scrambling to find new employment. By May 2020, he had secured a new position with a lower salary and no benefits, underscoring the financial and professional impact of EcoPower’s actions.

Sound familiar? Unfortunately, this scenario is all too common.

The Court’s Decision: Justice Served

Ontario Superior Court Justice Sanfilippo reviewed the evidence and made the following key rulings:

Unpaid Commissions and Bonuses

EcoPower owed 2604900 Ontario Inc. over $45,000 USD in unpaid commissions and bonuses. The court ordered EcoPower to pay the Canadian dollar equivalent of this amount.

Wrongful Dismissal Damages

For terminating Doughty without severance, the court awarded him $19,550 CAD in damages. This amount reflected six months’ pay, reduced by the income he earned from a new job.

No Evidence of Employer Misconduct

While Doughty alleged that EcoPower acted in bad faith, the court didn’t find enough evidence to award more severance pay or additional damages.

Legal Costs and Interest

The court awarded $11,063.08 CAD in legal costs and pre- and post-judgment interest.

What This Means For You

Whether you’re an employee or an independent contractor, this case highlights several important lessons:

• Know Your Rights as a Contractor or Employee: Doughty’s time as a contractor was factored into his length of service, increasing his severance package. This confirms that courts may recognize contractors as “dependent contractors” if their work is exclusive and continuous.
• Unpaid Compensation Is Recoverable: If your employer fails to pay commissions, bonuses, or wages, you don’t have to accept it. Courts will enforce contracts and hold employers accountable.
• Employers Must Provide Notice of Termination: EcoPower’s failure to pay severance led to a clear win for Doughty. Employers can’t simply ignore their obligations under Ontario’s Employment Standards Act.
• Documentation Matters: Doughty’s detailed records, including contracts and sales figures, played a crucial role in proving his claims. Keep meticulous records of all employment agreements and communications.

We’re Here to Help

This case is a powerful reminder that no employer is above the law. If you’ve been wrongfully terminated or left unpaid, you don’t have to face it alone. Legal action can seem daunting, but with the right evidence and support, justice is achievable.

At Samfiru Tumarkin LLP, we’ve helped thousands of employees and contractors secure what they’re owed since 2007. If you’re in a similar situation in Ontario, Alberta, and B.C., don’t wait. Contact us today to explore your options and take the first step toward resolution.

In a vast majority of cases, we resolve disputes quickly and effectively without trial. But when litigation is necessary, as in Mark Doughty v. EcoPower Inc., we’re ready to take the fight to court to achieve the justice you deserve.

Take Action Today

Have questions about unpaid wages, wrongful dismissal, or your rights as a contractor? Contact us today for expert legal advice. Our team is here to help you navigate the process and secure what you’re owed.