Employment Contracts

Employer’s Plea

Cases are few in which it is the employer which makes the submission that the contract is unfair, as reviewed above.

In one such unusual case, the termination provision in the employment agreement was found to be unconscionable, as a secondary argument, as the agreement was found to have failed due to an absence of mutuality, in Jung v Leheidli T’enneh Indian Band.

A Fiduciary Duty Owed to the Employer

The added element in this reasoning was that the plaintiff was found to have stood in a fiduciary capacity to the employer Indian band and acted in violation of this duty.

The plaintiff had two separate and concurrent employment agreements with the defendant Indian Band and its related Development Corporation which allowed the plaintiff to terminate the agreements and receive the severance sums. The B.C. Supreme Court stated as follows:

If I am wrong in my interpretation of the parties’ lack of agreement on the essential terms, I would also have concluded that the severance provisions found in paragraph 6 of each of the agreements are void because of unconscionability, the provision having been obtained by Mr. Jung in breach of his fiduciary duty to his employer.

This is an unusual fact situation in which the employee had arguably taken advantage of his sophistication to the detriment of his employer.