Post Termination Allegations of Misconduct: Employers – Think Twice!
By: Esra YacoutAfter-acquired cause is misconduct that is discovered only after an individual’s employment has ended. If this misconduct had been identified before termination, it could have justified a termination for cause. After-acquired cause can be a legitimate defense if raised in good faith.
However, the recent case of Hoem v. Macquarie Energy Canada Ltd, 2025 BCSC 446, provides us with an example of how improper allegations of after-acquired cause can backfire.
The Court Decision
Mr. Hoem was terminated without cause and received a severance package. He subsequently filed a lawsuit against his employer, claiming he was entitled to a larger severance amount. In defense of the lawsuit, the employer raised the argument of after-acquired cause, citing misconduct discovered after termination, which included consuming cannabis at work, dishonesty, and releasing confidential information.
The court rejected the employer’s claim of after-acquired cause and found that Mr. Hoem’s dishonesty was about matters unrelated to his job. This did not justify cause for termination. The court also concluded that Mr. Hoem had taken CBD for health reasons and there was no violation of the employer’s drug policy.
The court found that several allegations made by the employer were taken to trial even though they lacked supporting evidence. Additionally, although the allegation that Mr. Hoem had released confidential information was withdrawn before trial, the court determined that it should never have been made in the first place as there was no reasonable basis for it
The continued pursuit of unfounded claims, particularly those that could damage the employee’s professional reputation, was found to be a breach of the employer’s duty of good faith. The court awarded Mr. Hoem $35,000 in aggravated damages.
Key Takeaway for Employers
After-acquired cause is not a fallback option to justify a past termination. Employers must ensure any allegations are well-founded. Pursuing unsubstantiated claims can backfire, undermining the employer’s defense and exposing them to additional damages.
For more information about this case, or if you require legal advice in relation to an employee termination or a wrongful dismissal claim, please contact any member of our Employment and Human Rights Group
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In Part 1: Duties of Loyalty, Good Faith, Fidelity and Confidence Owed by All Departing Employees, published on March 10, 2023, we highlighted the importance of understanding the duties of loyalty, good faith, fidelity, and confidence that all departing employees (no matter how junior they may be) owe to their former employer. When the departing employee is a senior employee (i.e., an officer of the employer, a member of top management or a key employee), that relationship gives rise to additional fiduciary duties which arise, even if they are not set out in a written employment agreement.
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The coronavirus pandemic has brought so much uncertainty with it and has turned the world of work on its head. Every employer is required to have a COVID-19 Safety Plan that assesses the risk of exposure at their workplace and implement measures to keep their workers safe. On November 24, 2020, BC issued a Public Health Order (the “Order”) requiring the use of masks in all public indoor spaces in the province. Since this Order, our Group has and continues to receive a lot of questions from business owners and employers on the mandatory masking order, in particular, what happens if an employee refuses to comply with an employer’s COVID-19 Safety Plan including an unwillingness to wear a face mask?
In this blog post, we consider whether an employer can terminate an employee’s employment for cause for refusing to wear a face mask while at work.
