Lake v. La Presse, 2022 ONCA 742

By: Daniel Kraus and Fahad Warraich

In Lake v. La Presse, 2022 ONCA 742, the Court of Appeal has clarified the standard of “reasonable steps” that a former employee ought to take in mitigating their damages following wrongful termination, as it relates to seeking other employment. Ultimately, a terminated employee need only be required to seek out comparable employment that reflects the remuneration received, status held, and hours worked relative to the position they held at the time of dismissal.

The circumstances in Lake concern Merida Lake (“Lake”), who from August 2013 to March 2019, held the position of General Manager at the Toronto office of La Presse (2018) Inc. (“La Presse”), a Montreal based newspaper. In March of 2019, La Presse decided to close its Toronto office and accordingly terminated Ms. Lake, the most senior member of the office, on a without cause basis. Lake subsequently brought an Action against La Presse for wrongful termination, and at the Motion for Summary Judgment in this matter, the Court ruled that while Lake was entitled to a total of eight months reasonable notice (and a “lost bonus”) on the basis of her seniority and years worked, the damages awarded to Lake would reflect only six months of reasonable notice as a result of Lake’s delay in searching for other employment, and choice to unreasonably limit her search by “aim[ing] too high”, rather than applying for lesser paying positions.

The Motion's Judge did not address the second part of the test concerning mitigation by a former employee in the context of wrongful employment, which asks whether Lake would have found a comparable position within the reasonable notice period had she made reasonable attempts to do so.

Lake took appeal of the judgment rendered at the Motion for Summary Judgment, arguing, in part, that the Motion’s Judge erred in principle by faulting her for not seeking lesser paying positions, and made a palpable and overriding error in determining that she aimed too high.

Though the Court of Appeal agreed with the Motion’s Judge as to the unreasonable delay in Lake’s search for employment, it found that an error in principle was indeed made by the lower court in determining the said search ought to have encompassed employment of lesser remuneration, which the Court of Appeal clarified does not form part of a terminated employee’s duty to mitigate. Rather, the duty only extends to seeking comparable employment relative to the position held at the time of dismissal, which employment is typically similar in status, hours and remuneration. It is a duty evaluated relative to the steps a reasonable person in Lake’s position would take in respect of their own interests – not one where the dismissed employee must act in the former employer’s interest.

The Court of Appeal also found the lower court to have made a palpable and overriding error in arriving at the conclusion that Lake aimed too high when conducting her employment search. On the Court of Appeal’s assessment of the evidence, Lake made substantial mitigation efforts to find other employment that matched her experience and qualifications. It was also found that the Motion’s Judge did not give proper consideration to Lake’s evidence, and placed emphasis on the titles of the positions being applied for.

In addition to Lake’s evidence, the Court of Appeal found that La Presse was unable to meet its burden, in the context of wrongful termination, and demonstrate that Lake failed to take reasonable steps in mitigation, or that a comparable position would have been secured had she done so. When relying on Lake in future employment disputes, one must be mindful of the finding that La Presse’s failed to present sufficient evidence to meet its burden.

The Court of Appeal ultimately ruled that the judgment under appeal be replaced with a judgment in favour of Lake for damages that are reflective of eight months reasonable notice, negating the reduction ordered by the lower court.