A Ontario judge has blocked a proposed class-action lawsuit against Canadian Imperial Bank of Commerce that alleged the bank wrongly denied overtime pay to thousands of its employees. But the case is one of several similar lawsuits before the courts.
The Bank of Nova Scotia, Canadian National Railway Co. and others have also faced putative class-action lawsuits filed on behalf of thousands of workers demanding hundreds of millions in unpaid overtime.
In the U.S., similar cases have forced big companies to pay out millions to employees who were denied overtime cheques, or were wrongly classified as managers exempt from overtime-pay requirements. These blockbuster cases emboldened plaintiffs’ lawyers north of the border to launch similar cases.
But the recent ruling from the Ontario Superior Court appears to suggest that overtime lawsuits are facing more scrutiny in Canada. In his ruling late last month, Mr. Justice George Strathy denied a proposed overtime class-action suit against CIBC “certification,” or the green light a class action needs to proceed.
However, observers say the real ground rules for this kind of case will be laid down in a series of three decisions expected soon from the Ontario Court of Appeal. The province’s top court is weighing the future of another, separate overtime case against CIBC and cases against Bank of Nova Scotia and CN.
Meanwhile, Judge Strathy’s ruling in the latest case, known as Brown v. CIBC, quashes a lawsuit launched on behalf of analysts and investment advisers with the bank and CIBC World Markets who were seeking overtime pay.
The judge’s problem with the case was that the plaintiffs asserted all employees classified as “analysts” or “investment advisers” had been wrongly denied overtime. The judge found that some employees with these job titles are in fact managers and are not entitled to overtime pay. In fact, hundreds of different jobs at CIBC, with different responsibilities, bear the label “analyst.”
“Class members have little in common but their names,” Judge Strathy writes in his ruling. “The key issue of fact – namely, whether or not a person has managerial responsibilities – which is critical to the determination of overtime eligibility, cannot be determined on a common basis.”
The judge also notes that there was no evidence that other investment advisers, besides the proposed representative plaintiff Bryan Singer, had ever complained about overtime pay. Some, the judge details in his ruling, make more than $1-million and routinely wine-and-dine clients outside of work hours. (Lawyers for the plaintiffs could not be reached.)
The three overtime cases now before the Ontario Court of Appeal may not be so easy to bat away.
One of them is a class-action suit that Judge Strathy ruled should be certified: a case against Scotiabank launched by former employee Cindy Fulawka. She sold mortgages and small-business loans for the bank for almost 20 years, mainly in Saskatchewan, and says she was expected to skip lunch and stay well past quitting time, working two hours a day without pay.
An earlier class action against CIBC – and the first to target a Canadian bank – is also one of the trio still in the hands of the Ontario Court of Appeal. That case, filed by Toronto teller Dara Fresco, dates back to 2007. However, it was denied certification as a class action in 2009, when a judge ruled there was no evidence of a “systemic practice of unpaid overtime” at CIBC.
The third case on appeal was filed on behalf of front-line rail supervisors with CN demanding overtime pay. It was certified by Mr. Justice Paul Perell in 2010.
Toronto lawyer Louis Sokolov with Sack Goldblatt Mitchell LLP, who is working for the plaintiffs on all three cases still before the Ontario Court of appeal, said the latest ruling from Judge Strathy knocking down an overtime case isn’t an omen.
“Ultimately we will hear from the Court of Appeal the larger principles regarding these cases,” Mr. Sokolov said.
Patricia Jackson of Torys LLP in Toronto, who acts for CIBC in both cases against the bank, points out that judges have so far ruled consistently against the plaintiffs in her cases. But she wouldn’t speculate on what the Court of Appeal might do.
Former Ontario Labour Relations Board chairman Morton Mitchnick, now a lawyer with Borden Ladner Gervais LLP, acted for Scotiabank and for CN at the Ontario Court of Appeal.
He said even U.S. courts are now backing away from their enthusiasm for class-action cases launched by employees, citing recent U.S. rulings including the U.S. Supreme Court’s landmark decision last year to quash a sex-discrimination case filed against Wal-Mart Stores Inc.
“In the U.S. you now see the courts there taking a more cautious approach, and starting to roll back,” Mr. Mitchnick said.