THE QUESTION
Recently, I was let go from my full-time position as a sales, merchandising and design manager after 11 years. My numbers exceeded expected targets and percentages over prior years consistently.
The problem: we were partnered in a franchise. My husband and partner wore the designation; I was considered a partner by marriage and an employee with a salary, but shared equity and profit. We recently sold the brand to a U.S.-based company that hired my husband as a corporate manager in Canada. The publicly traded company instructed my husband to let me go. What am I entitled to? I don't want to embarrass my husband or burn bridges, but feel battered, humiliated and blindsided.
THE FIRST ANSWER
George Cottrelle
Partner, Keel Cottrelle LLP
The fact that your husband owned the franchise, and that you participated in equity and profit, in addition to receiving salary, did not affect your rights as an employee. Under Canadian employment legislation, notwithstanding the sale of the business, your employment with the Canadian franchise is treated as continuing with the U.S. employer. You retained the same rights to notice, and severance if applicable, arising on termination of your employment, against the U.S. company as you had against the Canadian franchise, based on your 11 years of employment.
In addition to your statutory rights, you have a claim for damages under common law arising from the termination of your employment, reflecting your 11 years of employment with the Canadian franchise.
If your employment was terminated on the basis of your marital status, this would be discriminatory under human-rights legislation in Canada. There are permitted exceptions, for example, where an employer has bona-fide reasons for anti-nepotism policies, but there is no evidence of this in your case.
It appears that the U.S. company may have induced you and your husband to sell the business, partly on the understanding that you would remain employed in the same role, and then required him to terminate your employment, resulting in humiliation and reluctance in pursuing your rights. All these matters may be grounds for additional damages against the U.S. company.
THE SECOND ANSWER
Kyle Couch
President and CEO, Spectrum Organizational Development Inc., Toronto
Moving from partner, whether by marriage or otherwise, to employee through a change of ownership changes the game considerably. While you were able to make the key decisions before, the sale to a new parent company dramatically changes your situation. The new parent company is within its rights to restructure the organization or implement its own set of policies. When family members either own businesses, or work for the same company, they often rely on trust and loyalty as opposed to legal documentation and contracts to outline working agreements. Therefore, your situation could have possibly been avoided if you had formalized your role as co-partner, and had written in your employment as part of the sale of the brand.
Many organizations implement family policies to avoid a myriad of potential negative situations. Your marriage could create resentment from your co-workers due to perceived preferential treatment or conflicts of interest. If your marriage were to fail, it could lead to sexual-harassment claims. The new parent company is only looking out for its best interests.