A recent Ontario Court of Appeal decision means that a properly
drafted employment contract can protect employers and
their employees from personal liability when carrying out a
termination.
In Richards v. Media Experts M.H.S.
Inc., Lauren Richards, the CEO of Media Experts, was
terminated for cause less than one year after she was hired.
Richards sued Media Experts for wrongful dismissal and personally
named its founder and executive chairman, Mark Sherman, claiming
his actions during termination caused her to suffer intentional and
negligent infliction of nervous shock.
The defendants sought to strike the claim against Sherman on the
basis of an exclusion clause in Richards' employment contract.
The exclusion clause stated that aside from 12 months' pay upon
termination, Richards would have no other rights to any severance
payment, damages or indemnity. Richards argued that the employment
contract did not preclude her from bringing an action against
Sherman
