Canadian employees seeking to challenge corporate overtime policies will face a tougher fight after an Ontario judge dismissed a $350-million bid to launch a class action lawsuit against Canadian Imperial Bank of Commerce for unpaid after-hours work.
In a 37-page decision that surged through the e-mail inboxes of labour and corporate lawyers across the country yesterday, Madam Justice Joan Lax of the Ontario Superior Court ruled that the facts surrounding overtime complaints at CIBC were too "individualized" to qualify or be certified as a class action lawsuit.
The claim was launched on behalf of CIBC employees by Dara Fresco, a teller with the bank since 1998, who alleged she was pressured to work as much as five hours of overtime a week at the bank for no pay.
Judge Lax said the circumstances of Ms. Fresco's case and evidence submitted by nine other employees and a branch manager showed "a variety of individual circumstances" that could only be resolved in individual legal claims.
She said the evidence "provides no basis in fact that there is a systemic practice of unpaid overtime at CIBC."
Ms. Fresco's claim marked one of the first attempts by employees in Canada to target a major company for improper overtime practices. More than 1,000 employees of CIBC signed up on a class action website set up by Ms. Fresco's law firm and similar overtime class action bids were launched by employees at Bank of Nova Scotia and Canadian National Railway Co.
Bank of Nova Scotia employees are seeking to have their class action certified by Judge Lax next month and the Canadian National Railways hearing is scheduled next year.
If Judge Lax's decision stands, legal experts said it is doubtful that the actions against Bank of Nova Scotia or CN will succeed. At a time when companies are asking more from their employees in a troubled economic environment, the ruling appears to limit one of the few affordable legal challenges available to workers who allege their companies are violating overtime laws.
Class actions are the lest expensive legal routes for groups, such as employees and investors, because lawyers typically operate on a contingency basis and are paid out of the proceeds of any award.
Other legal alternatives such as civil litigation or complaints to regulatory agencies are significantly more expensive or time-consuming.
Louis Sokolov, one of Ms. Fresco's lawyers said they are reviewing a possible appeal, but no decision has been made. If Judge Lax's decision prevails, he said, "it is a disappointing setback for Ms. Fresco, her colleagues at CIBC and employees across Canada."
Stephen Forbes, a spokesman for CIBC, said the bank is pleased with the decision. "We believe it shows CIBC has a clear overtime policy that exceeds legislative requirements in Canada."
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