Henderson v. Slavkin et al, 2022 ONSC 2964

Full Decision

In this case the court considered the effect of a termination clause which provided for termination without notice in case of a breach of confidentiality or conflict of interest.

Material facts

The defendants operated a dental surgery practice in the GTA. Both doctors are now retired. The plaintiff was the receptionist since 1990. Her employment was terminated on April 30, 2020. Her annual salary was $46,000 and she received 20 days of paid vacation. The defendants provided notice of their intentions to begin planning for retirement on May 26, 2015. As part of the correspondence sent to employees, two options were presented. i) New contractual terms with a definitive tenure in exchange for a signing consideration of $500. ii) Termination and working notice commenced as of May 26, 2015, if the new agreement was not executed. The plaintiff signed the agreement after two days.

The plaintiff’s position was that she was wrongfully terminated and that the agreement she executed was unconscionable, contained provisions contrary to the Employment Standards Act (“ESA”), the Occupational Health and Safety Act (“OHSA”) and were illegal. The defendant’s position was that, notwithstanding the termination, sufficient working notice was provided and that there is no entitlement to common-law damages. Their position was also that the plaintiff failed to mitigate her damages.

The contractual language in dispute is as follows:

13. Your employment may be terminated without cause for any reason upon the provision of notice equal to the minimum notice or pay in lieu of notice and any other benefits required to be paid under the terms of the (ESA), if any. By signing below, you agree that upon receipt of your entitlement under the ESA, no further amount shall be due and payable to you, whether under the ESA, any other statute or common law.

18. Conflict of Interest. You agree that you will ensure that your direct or indirect personal interests do not, whether potentially or actually, conflict with the employer’s interests. You further covenant and agree to promptly report any potential or actual conflicts of interest to the employer. A conflict of interest includes, but is not expressly limited to the following:

(a) Private or financial interest in an organization with which does business [sic] or which competes with our business interests.

(b) A private or financial interest, direct or indirect, in any concern or activity of ours of which you are aware or ought reasonably to be aware.

(c) Financial interests include the financial interest of your parent, spouse, partner, child or relative, a private corporation of which the [sic] you are a shareholder, director or senior officer, and a partner or other employer.

(d) Engage in unacceptable conduct, including but not limited to soliciting patients for dental work, which could jeopardize the patient’s relationship with us.

A failure to comply with this clause above constitutes both a breach of this agreement and cause for termination without notice or compensation in lieu of notice.

19. Confidential Information. You recognize that in the performance of your duties, you will acquire detailed and confidential knowledge of our business, patient information, and other confidential information, documents, and records. You agree that you will not in any way use, disclose, copy, reproduce, remove or make accessible to any person or other third party, either during your employment or any time thereafter, any confidential information relating to our business, including office forms, instruction sheets, standard form letters to patients or other documents drafted and utilized in the employer’s practice except as required by law or as required in the performance of your job duties.

For clarity, confidential information includes, without limitation, all information (in written, oral, tape, cd rom, diskette, and USB keys or any electronic form) which relates to the business, affairs, properties, assets, financial condition and plans, concerning or relating to the employer, our dental practice or patients and specifically includes all records, patient files, patient lists, patient names, patient addresses, patient telephone numbers, email addresses, invoices and/or statements, daily appointment sheets, radiographs, marketing information and strategies, advertising information and strategies, and financial information.

In the event that you breach this clause while employed by the employer, your employment will be terminated without notice or compensation in lieu thereof, for cause.

This provision shall survive the termination of this Agreement.     


  • Whether the plaintiff was wrongfully terminated.
    • Whether the termination clause was unenforceable.
    • If so, was it unconscionable.
  • If so, what measure of damages is to be applied.
  • If damages are awarded, whether the plaintiff mitigated said damages; and,
  • Whether Canada Emergency Response Benefit (“CERB”) payments received by the plaintiff should be deducted from an award for damages.

Brief answer

The court determined that the plaintiff was wrongfully terminated. Clauses 18 and 19 of the contracts were not in compliance with the ESA, and therefore invalidated the employment contract. The parties agreed on an 18-month notice period from which 3 months were deducted for failure to mitigate her damages. CERB payments are not to be deducted from the notice period.


At paragraph 25, the court set out the applicable framework for determining whether to enforce a termination clause as per Wood v. Fred Deeley Imports Ltd., 2017 ONCA 158 at [28]:

1. Employees have less bargaining power than employers when employment agreements are made.

2. Employees are likely unfamiliar with employment standards in the ESA and thus are unlikely to challenge termination clauses.

3. The ESA is remedial legislation, and courts should therefore favour interpretations of the ESA that encourage employers to comply with the minimum requirements of the Act and extend its protection to employees.

4. The ESA should be interpreted in a way that encourages employers to draft agreements which comply with the ESA.

5. A termination clause will rebut the presumption of reasonable notice only if its wording is clear, since employees are entitled to know at the beginning of an employment relationship what their employment will be at the end of their employment; and

6. Courts should prefer an interpretation of the termination clause that gives the greater benefit to the employee

At paragraph 27 the court reviewed interpretation principles where interpreting an employment agreement and said it must be remembered that contracts are to be interpreted in their context in a way that the parties reasonably expected the contract would be interpreted when they entered into it. Oudin v. Centre Francophone de Toronto, 2016 ONCA 514.

At paragraphs 28-29 the court said it should not strain to create ambiguity where none exists in the context of interpreting the termination clause. Amberber v. IBM Canada Ltd., 2018 ONCA 571. The role of a judge in interpreting a termination clause in relation to the ESA requirements is to “look for the true intention of the parties, not to disaggregate the words looking for any ambiguity that can be used to set aside the agreement and, on that basis, apply notice as provided for by the common law: Cook v. Hatch 2017 ONSC 47.

The court made clear at paragraph 26 that where an employment agreement is not consistent with the ESA, it becomes invalid, and the terminated employee becomes entitled to common-law damages.

In applying the principles of contractual interpretation [specific to employment agreements] clause 18 was found to be broad, unspecific, and ambiguous. Moreover, the conduct identified as for-cause dismissal do not in fact amount to such willful misconduct to constitute dismissal without pay in lieu of notice below the minimum entitlements prescribed within the ESA.

Clause 19 was equally broad, non-specific, and ambiguous. The clause does not provide sufficient circumstances to describe when and how termination may immediately occur for the disclosure of confidential information or how to assess inadvertent disclosure that is not willful.


The onus of demonstrating that the plaintiff has failed to act reasonably to mitigate her losses is that of the defendants and is typically a high onus: Lalani v. Canadian Standards Association, 2015 ONSC 7634. The Supreme Court of Canada in Red Deer College v. Michaels, [1976] 2 S.C.R. 324 at p. 332 expressly indicated ‘The burden which lies on the defendant of proving that the plaintiff has failed in their duty of mitigation is by no means a light one, for this is a case where a party already in breach of a contract demands positive action from one who is often innocent of blame.’

In Adjemian v. Brook Crompton North America (2008), 67C.C.E.L. (3d) 118 at [21] the court emphasized that mitigation need not be perfect, only reasonable. The employer cannot pick away at the plaintiff’s performance with bald suggestion that she could have done better.

Reviewing the plaintiff’s efforts, the court decided on a uniquely modified determination that her conduct was reasonable in the circumstances, taking into consideration the COVID-19 lockdowns of dental practices, her relocation out of Toronto and her efforts to secure a new job. The defendants failed to lead evidence of comparable open positions to which the plaintiff could have applied. The plaintiff took 18 months from the date of her termination to start looking for work. That delay would not normally meet the test for mitigation. Given the circumstances as described, and her age (63), the court reduced the agreed upon notice period by 3 months.


After considering the cases going both ways (enumerated from paragraphs 61-75 of this court’s decision), Brown J., decided in these circumstances the CERB did not amount to a “compensating advantage.” The plaintiff did not ‘cease working’ for reasons related to COVID-19 and her notice of termination long predated the pandemic. The receipt of CERB was not sufficiently connected to the defendants’ breach of contract on a but-for basis. Importantly, the CERB benefit is not, in this court’s opinion, a benefit intended to be an indemnity for wage loss arising from the employer’s breach of the employment contract.


The court strongly urged the parties to agree on costs, failing which, written submissions were to be submitted and limited to three pages in length within 60 days’ time.

Additional Reading

Written by

Antonio is a litigator with Lemieux Law. His practice focuses on motor vehicle accidents, accident benefits, occupiers’ liability, personal injury, long-term disability, wrongful & constructive dismissal, CPP disability, human rights, general litigation and WSIA Appeals. When Antonio is not practicing law, he enjoys playing hockey, working on cars, and visiting family in southern Italy.