RBC Ex-CFO Nadine Ahn sues for $49M in wrongful dismissal claim

Royal Bank of Canada’s (RBC) former chief financial officer Nadine Ahn is suing the bank for wrongful dismissal, seeking $48.9 million in damages, after making headlines this past April for being fired because of her romantic involvement with coworker Ken Mason.

Ahn argues that the bank had made a “devastating error” when firing her over an alleged personal relationship with Mason. She has since denied that the two were romantic partners and stated that she suffered “palpable reputation harm” and “public humiliation” as a result of the accusations.

In Canada, an employee can claim wrongful dismissal if they are not provided their full severance pay when they lose their job without cause, as Ahn alleges in her lawsuit.

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Investigation details and statements of claim

• Accusations of a secret relationships at work: Ahn’s lawsuit decribes how Dave McKay, the bank’s chief executive officer, asked her to attend a meeting on the morning of April 15th. However, according to her court filing when she showed up Mckay was not there, and she was ambushed with questions from a lawyer about her relationship with Mason. Her laptop and phone were also seized.
• Unfair advantages: “RBC’s investigator accused Ms. Ahn of providing Mr. Mason with preferential treatment and insinuated that they were having an affair,” according to her statement of claim. “Ms. Ahn pleads that RBC’s allegations are patently false.”
• Making an example: Mason- who was also fired- has filed a lawsuit against RBC as well. According to his statement of claim the bank had “ambushed Ken with a discriminatory and inappropriate/unreasonable workplace investigation meeting” that was “unfair, biased and procedurally flawed.” and “RBC opted to make an example of Ken and Ahn by wrongly publicly shaming them in order to project moral righteousness, appearing to swiftly investigate and punish perceived corruption.”
• Laws and rules for banks: Despite this, RBC spokesperson Gillian McArdle stated “These claims are without merit, and we will vigorously defend against them in court, we conducted a thorough review with an investigation by outside legal counsel and the facts are very clear that there was a significant breach of our Code of Conduct based on the irrefutable evidence collected during the investigation.”

The bigger picture

Following Ahn’s termination in April, Katherine Gibson was appointed the interim CFO as RBC moved quickly to maintain stability and continue its operations without disruption.

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This isn’t a new problem for RBC. Past issues with undisclosed relationships have led to similar actions, highlighting the ongoing challenge banks face in managing personal relationships within the workplace. It stresses the importance of clear policies and systems to report and manage unethical behaviour.

Such high-profile terminations have wider effects, influencing how people see RBC and the banking sector as a whole. It underlines the importance of clear, honest communication and the need for banks to strictly follow both their own rules and broader regulations to keep trust and integrity intact.

Are romantic relationships at work illegal?

The news about Ahn being involved in a personal relationship with another bank executive has sparked discussions around the rules of workplace romance, especially when it involves employees at different levels of power.

In places like Ontario, Alberta and B.C., there are no laws that prevent employees from dating each other, no matter their positions in the company. This means that, legally speaking, it’s okay for co-workers to have romantic or intimate relationships.

However, in professional settings, including those at financial institutions like RBC, it’s crucial to keep a fair balance of power among all employees.

This balance helps ensure that decisions, promotions, and pay raises are made fairly and without bias.

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While no laws in Canada forbid relationships between staff members, it’s generally seen as risky for a boss to date someone they oversee.

This is because of the power difference between a manager and their employee. Such a difference makes it hard to tell if the relationship is truly voluntary, as the senior person has a lot of influence over the other’s job and career.

WATCH: Employment lawyer Jon Pinkus spoke to CTV News about Toronto Mayor John Tory’s resignation and the possible repercussions of workplace relationships.

Can companies ban workplace relationships?

The short answer is yes. Employers can choose to ban staff from forming romantic relationships with co-workers in an effort to protect themselves from legal liabilities.

However, this approach is considered outdated and potentially harmful to the company for two reasons:

• The business may lose talented employees who are forced to choose between their job and their workplace relationship
• Employees may not report non-consensual relationships out of fear that they could lose their job

Instead of banning office dating, a better solution for employers is to implement workplace dating policies that address intimate relationships between superiors and subordinates — or those that could cause conflicts of interest.

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Can I be fired for dating a co-worker?

Non-unionized employees in Canada can be fired for having a romantic relationship with a co-worker.

This would be considered a termination without cause. The laid off worker would be entitled to a full severance package, which can be as much as 24 month’s pay, depending on various factors.

However, employers should be careful about dismissing a staff member over a workplace relationship.

Instead, companies can:

• Take less dramatic measures like a written warning or paid suspension
• Find accommodations that work for everyone involved, which could include separating the employees while at the office so they don’t directly work under one another

It’s very unlikely that a company can fire someone “for cause” – or without severance pay – if their workplace relationship is in breach of policy.

This type of dismissal is reserved for the worst kinds of workplace offences, such as serious insubordination, theft or assault.

If the consensual relationship is a serious conflict of interest, and it’s damaging the employer’s business interests or reputation, then the company might have grounds to terminate a worker for cause.

Lost your job? Talk to an employment lawyer

If you have been fired or let go for any reason, contact the experienced employment law team at Samfiru Tumarkin LLP.

Our lawyers in Ontario, Alberta, and B.C. have successfully represented tens of thousands of non-unionized individuals.

In addition to severance package negotiations, we can assist you on a broad range of employment matters, including:

If you are a non-unionized employee who needs help with a workplace issue, contact us or call 1-855-821-5900 to get the advice you need and the compensation you deserve.