Five former Heenan Blaikie LLP legal assistants are suing the now-defunct firm, seeking a combined total of close to $600,000, according to court documents obtained by Precedent.
The lawsuits, filed at the Ontario Superior Court, allege that Heenan Blaikie, after dissolving in February, failed to make appropriate termination and severance payments.
The claims range in value from around $15,000 to $418,000.
Each assistant worked out of the firm’s Toronto office, which employed around 170 lawyers and, according to one statement of claim, more than 160 legal support staff at the time of the collapse.
Two assistants suing for ‘bare bones’ notice and severance pay
On February 14, the documents reveal, Heenan Blaikie sent a notice of termination to the legal staff, explaining that the firm would close on February 28. According to the statement of claim, staff members were then put on working notice for two weeks — this meant they had to continue working until the end of the month and would receive full pay and benefits during that time.
In one suit, two former assistants — both of whom found work at another national firm after the collapse — claim that after February 28 they never received any further payment.
By providing only two weeks of working notice and no severance, Heenan Blaikie paid well below what the law requires, according to allegations in their statement of claim.
“We’re talking about bare bones employee rights,” says Christopher Perri, an associate at Cavalluzzo Shilton McIntyre Cornish LLP, and one of two lawyers handling the case. (Both assistants gave permission for their counsel to comment for this story on the condition that they, themselves, would not be named.)
Because Heenan Blaikie fired 160 staff members at the same time, Perri argues, the firm must provide an additional six weeks of termination pay to comply with the mass termination provision of the Employment Standards Act (ESA). If an employer fires between 50 and 199 people at one time, then the law requires them to provide 8 weeks of termination pay to every employee — regardless of how long they worked for the employer.
On top of termination pay, the suit asks for severance pay based on both assistants’ tenure at Heenan Blaikie. One assistant, who claims she worked at the firm for 26 years — including 17 years spent at another big firm that she says Heenan Blaikie agreed to recognize — is asking for 26 weeks of severance. And the other, who says she spent six years at Heenan Blaikie, is asking for six weeks of severance. (Under the ESA anyone who works at the same place for five years is entitled to one week of severance per year of service, up to a maximum of 26 weeks.)
The legal assistants are suing for $42,413.44 and $14,472.82, respectively.
It is extremely rare for an employer to refuse to pay the minimum amount required by law, says Cavalluzzo lawyer Daniel Rohde, who is representing the two assistants with Perri. When it does happen, he explains, it’s usually because an employer has not consulted a lawyer and simply doesn’t understand the law. For a law firm, however, he says the situation is “very bizarre.”
Even though his clients found work right away, Perri says the minimum statutory entitlement law forces employers to pay them ESA termination and severance fees for a specific reason: at their new job they have no seniority. If either one is fired next week for any reason, he says, “they are going to get one week’s notice.”
After filing the lawsuit in early May, he says the Heenan Blaikie transition committee — a group of lawyers handling the wind-up, headed by former partner Kenneth Kraft — did not respond to any of their emails or issue a statement of defence. (Kraft did not respond to Precedent’s request for an interview.)
As a result, Perri and Rohde asked the court to note Heenan Blaikie in default, which the court did in July.
But, on the afternoon of October 1, about three months after the court noted Heenan Blaikie in default, Perri says Greg McGinnis, a partner at Mathews Dinsdale & Clark LLP, called him to say he would represent Heenan Blaikie and defend the claim. Although, so far, no official statement of defence has been filed.
McGinnis declined to comment for this story.
Former Heenan partner writes anonymous letter to two legal assistants
Shortly after filing their claim, the two legal assistants mentioned above arrived to work at their new firm one morning to find an envelope sitting on their chairs. Both envelopes contained the same thing: a letter from an anonymous former Heenan Blaikie partner, who is now a colleague at their current firm.
“I am not asking you to withdraw [your claim] and I am not angry at you for making it but I did want you to understand some of the considerations,” the lawyer wrote, according to a copy of the letter obtained by Precedent.
The letter explains that Heenan Blaikie partners “realize” that legal assistants “suffered strain” but said that each partner “made it a priority to try to make sure that as many of our employees as possible would suffer little if any economic loss.”
The letter goes on to say that “each of us are looking at hundreds of thousands of dollars lost.” As a result, the letter says, claims filed by employees who have not “suffered economically . . . represent a personal hardship to us and to our families.”
“So while I am not asking you to reconsider or even withdraw your claim,” the letter continues, “I wanted you to know that . . . partners will end up paying your claim out of our pockets.”
Upon receiving the letter, Rohde says his clients — already in a tight spot, given that they’re working for the same lawyers they’re suing — “felt threatened and offended. The writer of the letter is someone they work for currently, and who could have considerable control over their livelihood.”
“What the letter is saying is — reading between the lines, of course — ‘Stop your lawsuit, so we can take a bigger piece of the pie,” says Perri, referring to the fact that the amount of equity former Heenan Blaikie partners will be able to reclaim depends on how much money the firm spends paying back its creditors. “I think it’s fair to say that the letter’s trying to bully them out of the case.”
Rohde says the note also reflects a genuine ignorance about the financial lives of legal staff. “How many Heenan partners own major assets — for example, a winery in Niagara and what not? Selling your assets — I’m sure it’s hard, but I find it to be out of touch.”
“The unnamed partner is talking about losing investments that might total in the hundreds of thousands, while our client would never have had hundreds of thousands to invest in the first place,” explains Perri. “The partner is worried about investments, while our clients are worried about their basic statutory minimum employment entitlements. There is a significant disconnect here.”
Seventy-year-old assistant feels ‘betrayed’
In by far the largest claim that a legal assistant has filed against Heenan Blaikie, a 70-year-old legal assistant, who is still unemployed, is suing her former firm for $418,000.
In this case, neither side can agree on how many years the assistant, Rosemarie Brugos, worked at Heenan Blaikie.
The lawsuit asserts that, when she started at the firm in 2004, Heenan Blaikie agreed to “recognize, for all purposes, her past 25 years of service with Goodmans.” (In fact, she says Heenan Blaikie gave her a 30-year service award in 2009.) In this scenario, the case alleges, she would be entitled to at least 26 weeks of severance.
But Heenan Blaikie has only agreed to pay Brugos 9.7 weeks of severance, according to her statement of claim.
Heenan Blaikie, in its statement of defence, says the firm “had no knowledge” of her “prior service at Goodmans.” It went on, however, to say that her “prior service at Goodmans was recognized, if at all, only for the purposes of benefits-related entitlements such as vacation.”
“I would like to see a partner at Heenan Blaikie get in the witness box at trial and say, ‘When we give out service awards, we don’t really mean they served for that period of time,’” says David Hager, the lawyer representing Brugos.
The statement of claim and the reply to the statement of defence also allege that, at this point, Brugos has only collected 5.3 weeks of severance pay, despite being promised 9.7 weeks. Brugos, says Hager, “felt betrayed with how Heenan Blaikie handled the dissolution.”
Hager is asking for 24 months of notice, plus $100,000 in punitive damages. “I will push until I get a fair settlement,” he says. “Or I will drag [Heenan Blaikie] kicking and screaming into the courtroom.”
(Greg McGinnis, who declined to comment, is also representing Heenan Blaikie in this suit.)
So far, there are only two other legal assistants with pending lawsuits against Heenan Blaikie at the Ontario Superior Court. But it is possible that more claims could be filed within the two-year statute of limitations.
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