Client Win: Sales rep wins after severance held hostage by hardball employer

When Ms. Perretta faced the unexpected termination of her employment at the onset of the COVID-19 pandemic, she turned to Samfiru Tumarkin LLP to fight for her rights. What followed was a decisive court ruling against her tech sector employer that not only validated her claims but also sent a powerful message to employers about upholding contractual obligations and respecting employee rights.

The Case: Perretta v. Rand A Technology Corporation

The Story Behind the Case

From Dedication to Dismissal: Perretta began her career with Rand A Technology Corporation (Rand) in 2014 as a Customer Advocate. Over the years, her hard work earned her a promotion to Sales Representative, where she received a base salary, plus commissions and benefits. After 5.5 years of service, Rand terminated her employment without cause on March 31, 2020, during the early days of the COVID-19 pandemic.

The Catch: Rand’s termination clause promised two weeks of pay on top of her basic entitlements under the Employment Standards Act (ESA). But instead of following through, the company refused to make this payment unless Perretta signed a full and final release. This release contained terms that only benefitted Rand, including confidentiality, non-disparagement, and even a requirement to adjust her LinkedIn profile. To make matters worse, she was given an arbitrary deadline to comply, or else the offer would be revoked. When Perretta refused to sign, Rand pulled the offer altogether.

Fighting Back: How the Case Unfolded

The Retraction: Rand eventually apologized and paid Perretta the minimum statutory entitlements. But by then, the damage was done. Feeling that her rights had been violated, Perretta turned to Samfiru Tumarkin LLP for help. The firm argued that Rand’s actions—holding her contractual rights hostage in exchange for a release—amounted to a breach of the employment contract. This breach, we contended, invalidated the termination clause and entitled Perretta to full common law severance.

Legal Tug-of-War: Rand pushed back, arguing that its termination clause should still be enforceable despite its earlier conduct. The company also claimed that Perretta hadn’t done enough to find a new job and should receive less compensation as a result.

The Court’s Findings

A Resounding Rejection of Rand’s Tactics: The Ontario Superior Court of Justice sided decisively with Perretta, ruling that:

1. Repudiation of Contract: Rand’s refusal to pay the two weeks’ salary and its additional demands showed that the company no longer intended to honor the employment contract. Justice Sanfilippo emphasized that this was no minor mistake but a deliberate act that undermined Perretta’s rights.
2. Unenforceable Termination Clauses: The court found Rand’s termination clauses invalid because they included an overly broad definition of “just cause.” This conflicted with the minimum standards set by the ESA and made the entire termination clause unenforceable.
3. Common Law Severance: Considering Perretta’s age (49), her tenure at the company (5.5 years), and her role, the court awarded her six months of severance pay.
4. Reasonable Mitigation Efforts: Perretta had applied for 75 positions during a tough job market, proving she made reasonable efforts to find new work. The court rejected Rand’s argument that she failed to mitigate her damages.

The Outcome

The court awarded Perretta $16,807.52 in damages, representing six months of pay, commissions, and benefits, plus pre- and post-judgment interest. This victory underscores the importance of holding employers accountable for their obligations—even in the face of economic uncertainty.

What This Means For You

Lessons for Employees

• Don’t Sign Under Pressure: If your employer demands you sign a release to receive severance, think twice. You may be entitled to more than what’s being offered.
• Understand Your Rights: Termination clauses that attempt to contract out of ESA standards are unenforceable. You could be eligible for a full severance package.
• Seek Legal Advice: Always consult an employment lawyer at Samfiru Tumarkin LLP before accepting a severance package or signing a release. As this case shows, the initial offer may fall far short of what you deserve.

Lessons for Employers

• Follow the Letter of the Law: Termination clauses must comply with the ESA and be carefully drafted to avoid ambiguity. Otherwise, they risk being invalidated.
• Avoid Overreach: Requiring a release or imposing arbitrary deadlines can backfire, as demonstrated in this case.
• Prioritize Compliance: Regularly review employment contracts to ensure they align with the latest legal standards and avoid costly litigation.

We’re Here to Help

Samfiru Tumarkin LLP’s representation of Ms. Perretta exemplifies our commitment to protecting employee rights. This case not only delivered justice for our client but also reinforced critical principles of fairness, accountability, and respect in the workplace. If you face a wrongful dismissal in Ontario, know that the law is on your side—and so is a dedicated legal team ready to fight for what you deserve.

Since 2007, we’ve achieved countless victories for non-unionized employees across Ontario, Alberta, and B.C., championing fairness, clarity, and justice. At Samfiru Tumarkin LLP, we don’t just fight for our clients—we empower them to understand their rights and take control of their futures.

In most cases, we resolve disputes quickly and effectively without going to court. But when litigation is necessary, as it was in Perretta v. Rand A Technology Corporation, we’re fully prepared to go to court to secure the justice you deserve.

If you’re facing an unfair dismissal, you have rights. We’re here to ensure your voice is heard, your dignity upheld, and your rights protected. Reach out to us today to discuss your case.