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In episode 16, our hosts take a trip to mitigation station. Mitigation is a term used all the time in employment law – but what the heck does it mean? Jill and Dana explain the principle of the “duty to mitigate”, or in other words, the duty for employees to minimize their losses if they’ve been terminated.

Full episode transcript below:

Dana DuPerron: Welcome to All Worked Up, the podcast for two employment lawyers break down real life workplace issues that affect real people. I’m Dana DuPerron.

Jill Lewis: I’m Jill Lewis and we’re senior associates at Nelligan law. And we’re super excited to bring you this podcast aimed at making employment issues interesting, accessible for employees and employers.

Dana DuPerron: Welcome to all worked up. I’m Dana.

Jill Lewis: I’m Jill.

Dana DuPerron: Jill, what’s got you all worked up today?

Jill Lewis: OK, we’re worked about mitigation.

Dana DuPerron: Mitigation? What’s that?

Jill Lewis: Subject to the duty to mitigate. You’re going to hear it all the time when we’re talking to you. And so we’re going to get at you like right away. You’re going to have to mitigate if you’re going after your employer for a common law notice period.

Dana DuPerron: Yeah, that reasonable notice period. Now, I’m going to direct you back to the beginning. I don’t remember which episode it is, but I’m sure that the title will tell you if you look down, but there’s one on your entitlements upon termination.

Jill Lewis: Yes.

Dana DuPerron: You got your ESA amounts that is notice and statutory severance pay. So, maximum notice of eight weeks, maximum severance pay of 34 weeks, depending on how long you’ve been somewhere. You cannot mitigate that. Employment is terminated, you get it. Common law, if you either don’t have a contract, or there’s a way out of your contract, and you get reasonable notice of the termination of your employment. And we tell you, but the reasonable notice period, if we tell you it’s 18 months, do you get 18 months?

Jill Lewis: No. 

Dana DuPerron: Maybe.

Jill Lewis: OK, maybe you do. So that’s what I always say to a client is maybe that judge says, “Yes, Dana. I hereby say you are entitled to 18 months. Now show me it actually took you 18 months to find new work.” And that’s when you’re going to have trouble, right? So I always like picture somebody’s face, “18 months. Ha, yeah.” And then like, show me you actually took 18 months, because you have to mitigate your damages. And that’s going back to like a contract principle. If you’re suing somebody and you’re going after them for all this money, you have to mitigate the harm done to you. 

You can’t just sit back and, “All right, I’m just going to like Netflix, and we’re just going to like relax and this person is going to pay me.” You still have that duty to go out and mitigate whatever the harm is being done to you. So if it’s employment law, the harm being done to you is the lost job. So you have to go out and find a new job.

Dana DuPerron: Yeah. Now that is more nuanced than it sounds at first glance, right. You don’t have to go find a job that isn’t comparable to the job that you’re in. So comparable, we’re kind of looking at least sort of 80% of the income, similar duties like a similar job. If you’re working as like a software developer, you don’t have to go work as a chef. You can but you don’t have to satisfy that duty to mitigate.

Jill Lewis: You were Executive Director of such and such, you don’t have to take an entry level position.

Dana DuPerron: Yeah. It’s that sort of the same level. And it’s also if you had an indeterminant position, you don’t have to accept contract work. If you do, the employer is going to argue that they get $1 for dollar credit. So say, I’m working a job making $100,000. 

I don’t have to accept a job to mitigate my losses earning $40,000. But if I do, the employer is going to argue that they get $! for dollar credit for everything that I earned in that time. Now, there’s case law, newer case law, that if you do accept a job, you didn’t have to accept to mitigate, the employer doesn’t get credit for that.

Jill Lewis: What do you feel about – I mean, I like it.

Dana DuPerron: Yeah, I know. I know. But when we think about why the employer gets that dollar to dollar, it’s because you wouldn’t have been earning that money had you been employed.

Jill Lewis: You didn’t have to take the job.

Dana DuPerron: I know but you did. When we’re talking about that notice period, it’s like the position you would have been in how’d you maintain that job, had you been still working. If you were still working, you wouldn’t have accepted that three month contract in this or that, but you wouldn’t have had to. Maybe you have bills that you have to pay that you’re fighting the employer for something and you can’t just not pay them. 

And they haven’t given you what they were supposed to give you. If they had given you that working notice, which a lot of people don’t want anyway. But if they had said, “Hey, your job is gone in 18 months” and through that 18 months, you could have looked for something, in that time, maybe you would have found another job earning the same or more at the end and not been able to pay your bills.

Jill Lewis: OK, there you go. OK. All right. All right. I like that case law. Of course, they do as an employee side, but always just in my brain. I’m thinking of it in a mathematical equation, right? This is the money you would have been earning. But yeah, no, you’re exactly right. So going back to mitigation, what is your responsibility? So right away, when you’re terminated, do you have to go out and find like the first job?

Dana DuPerron: No, not immediately. You’re kind of allowed a grieving period. If that grieving period isn’t really like all summer.

Jill Lewis: I mean, it’s not crazy to take the summer off, but also, go ahead and look. You’re not going to find a lot. There’s actually not a ton of stuff during the summer. So it’s not outrageous to say.

Dana DuPerron: But also, there’s a difference between employment was terminated at the end of June, took the summer off, and employment was terminated in March. Well, September’s the time. That’s the going to be the date. I have seen cases where the judge was like, “He waited too long to start.”

Jill Lewis: And to start what? Start what? So I mean, mitigating and that duty to mitigate involves all those steps of working on your resume. So it doesn’t have necessarily like maybe in the first couple of weeks, you’re poking around on LinkedIn, you’re scheduling coffee dates, networking a little bit. You’re working on your resume. 

If your employer is offering you career counselling, outplacement services and you don’t take them on that, that’s going to hurt your chances down the road It’s going to look like you’re not mitigating. Take advantage of all that, all the things.

Dana DuPerron: If they offer you a letter of reference, on the flip side, for an employer, when they terminate like a long service person without offering a letter of reference, or offering that outplacement that can work against you.

Jill Lewis: Yeah, I always recommend an employer look into outplacement and especially for the longer service employees. So yeah, you don’t have to take the first job. That’s the other thing. You don’t have to take the first job that comes at you unless it’s like perfectly reasonable.

Dana DuPerron: Even then though, if it’s the next day, and you’re like, “Oh, my God, I couldn’t even wrap my head around it yet.” I think there’s leeway there. What a judge is going to look at is like, were you making reasonable efforts? It doesn’t have to be perfect. It has to be reasonable. 

So document what you’re doing. That’s what I always tell people like if you’re looking at Indeed or whatever, what words did you search? What came up? Print the job application that came up. If you made the application, absolutely, keep records because you’re going to have to show those. 

If you didn’t apply to a position, print it off or if you don’t have a printer or save a PDF copy with notes on why you didn’t apply to that one. I did not apply, like salary was way lower, or didn’t have this qualification or whatever that was required. Because then you can show what was out there that you were looking and why you didn’t get it. 

So you have this duty to mitigate, it’s the employers burden to prove that you failed to mitigate, which means they’re going to have to show that there were jobs out there generally, that you didn’t apply to. And that’s where it can hurt them if they don’t offer outplacement, don’t give you a letter of reference. We see a lot of employer counsel these days who send over like, “Here’s all these jobs that are out there. Apply to all of them.”

Jill Lewis: Those kill me.

Dana DuPerron: And I get why they’re doing it, to show that they’ve satisfied that they can show that there are jobs. Although more often than not, my clients will go through that and say, I’ve seen all of these and here’s why” but that’s fine.  And what happens if a judge says, “You failed to mitigate.”

Jill Lewis: Failed to mitigate. You don’t get your notice. It’s knocked right down, right?

Dana DuPerron: It wouldn’t be nothing.

Jill Lewis: Yeah, right. It’s not going to be nothing but there may be – and there may be a date there too or it’s crystallized and that’s it.

Dana DuPerron: “Well, if you would look, I think you would have found it two months sooner than you actually did.”

Jill Lewis: Exactly. You wouldn’t get punished. Yes. So that is something we got to sometimes smack up our clients a little like, “Are you looking for work?”

Dana DuPerron: Yeah. And people often don’t want to look until the deal signed and stuff.

Jill Lewis: “I’m not going to find anything.” This gets me worked up. I’m not going to find anything. There’s nothing out there. How do you know? There’s just nothing. It’s just not a good time in the industry right now. They’re not looking, it’s the end of the fiscal year. There’s no funding. OK, go show me that. Show me. You have to make the effort.

Dana DuPerron: Yeah. And it’s hard to show nothing. You’ve seen the things where it’s like, I didn’t get the earrings. Show me that you didn’t get the like, whatever the memes. You can say, I searched these keywords on this website.” 

Jill Lewis: Yeah, literally can just be like the specific date that you searched LinkedIn. Talk to your network.

Dana DuPerron: Record the days that you do though. And if you send text messages to someone, you have an obligation to keep those LinkedIn messages, Facebook messages, keep those. And you know what, try not to work it in with all kinds of personal stuff, too because you’re going to have to produce those. 

So if it is like a friend, like not like, “Oh, hey, like, how’s it going? I lost my job. I’m looking for something. Anything there? My boss sucks. My wife just had surgery or something”. Stuff that it’s like I can probably blackout some of it, but then they’re going to say, “What’s blacked out? I want to see it.” And it’s just try to keep those things work related.

Jill Lewis: So show us. You have to go out and look. That is such a big piece when people come. And I am going to call out all you lovely long service employees who come in. I love you guys. I love all of you but you’re not entitled to a 24 month notice period without a duty to mitigate. You have to be looking. 

You’re just making my job harder. You’re hurting your position, you’re harming your position, if we show up, because a lot of times what will happen with those longer service, they can be entitled to quite a bit. And maybe we can’t get there just through demand letter. So we’re going to go to mediation. 

And if we have to show up at mediation with a blank mitigation journal and nothing that shows like what you’ve been doing. Yeah, your position is harmed. If you can come with like a well-organized like, these are all the applications, this is everything I’ve done, like really prove your case.

I mean, when you go to mediation, we’ll talk about that on another episode, like what to expect mediation, but we’re not arguing points of your case. You’re not really like up against a judge or anything like that. But you know what, it actually makes the other lawyers job easier with their client to show them. Do you know what I mean? 

Sometimes it’s helping other side get there because it can be hard for some employers to agree on that longer notice period. And sometimes that’s even what the lawyer is looking for. It’s like, “Give me something I can take back to the client and say, look, it really does take them that long.” 

Here is the evidence that’s going to work or it’s going to be very difficult for us to prove that they failed to mitigate. You’re only helping yourself. I think what people are worried about is they’re actually going to find a job.

Dana DuPerron: Yeah. And then you don’t get the big payout. which is kind of actually the flip side in the sort of last thing I wanted to talk about with that, unless there’s something else you want to talk about.

But the last thing that I did want to talk about with respect to mitigation is also when you come in on the front end and we’re reviewing a package, we talk about mitigation and how that affects your entitlements. Because it happens where you have an offer of OK, so say you are 60 years old and you’ve worked somewhere for 30 years. You’re in a senior position.

Jill Lewis: I’m hoping I get fired at this point. I’m ready to retire.

Dana DuPerron: You’re a senior position, high salary, and your employment is terminated without cause and then you come see us and you don’t have a contract. And your notice period is probably hands down 24 months. But you were already looking to leave before they terminated your employment and you have something lined up starting in two weeks. You were about to hand in that resignation making more. 

And so you’re entitled to 24 months, but they’ve offered you 18, take that money and run. Because if they find out, they might pull it and then they say, “Here are your statutory minimums. Here’s eight weeks.” If they’re not a statutory severance employer, forget the 26 weeks of – did I say at the beginning that you could get 34 weeks of statutory?

Jill Lewis: Yeah, you did. I was actually going to check it. Well, I was like oh my God, did it go up to 34?

Dana DuPerron: No, 34 is the total. Rewind back to the beginning. Correction. It’s actually 26 weeks, 34 altogether.

Jill Lewis: I was literally like, “OK, Jill, make a note” because I told somebody today it was 26. 

Dana DuPerron: No, sorry. My bad. My bad. Mistake.

Jill Lewis: That’s all right.

Dana DuPerron: Mistake. We will put that in the caption when we describe the episode, but anyway. So then they pay you those minimums because you have mitigated. And we have arguments that we can work with that a little bit. You don’t know how long that job is going to last. Maybe there’s a probationary period. Maybe it doesn’t work out. Maybe the business goes bust. Those are big maybes, sometimes big risks.

So when you’ve got like kind of a windfall there that you can walk away from. I’ve seen it happened where people are like, I try to talk people through how long the demand letter process can take and everything because I say like, “If you’re going to find a job, if you know that you’re going to reemploy, sometimes you’re better to take the money and run than to get into that drawn out process.

Jill Lewis: It’s a small town. People find out. 

Dana DuPerron: Sometimes you want to post you got a new job. It’s hard to keep that quiet for a long time if it’s taking a while. And you never know who’s talking up above.

Jill Lewis: I’m going to piggyback on this. If you are in the negotiating process and we’re getting you a deal. And then we’re going back on a counteroffer and suddenly, you have a job offer, you have to tell us right away.

Dana DuPerron: Well, if the other side asks, which they often do, you have to disclose. Toy have to answer honestly. You can’t lie.

Jill Lewis: So I have played that game with clients. I mean, just based on their instructions like they fully understood what could happen if we went back one more time. It is a gamble. You are gambling because that last offer that was on the table is gone. As soon as you send a counter, it’s gone. 

So if you know you have a job coming up and you want to gamble, pretend you don’t and send over a counter. And they ask us, “Does he have a job? Does she have a job? Has she signed something?” It could totally go bust. So mitigation is important. You have to do it.  You’re going to find new work anyway. So it keeps you busy. But if you are serious about going for that common law notice period –

Dana DuPerron: There really are no jobs out there.

Jill Lewis: You got to prove it. You have to prove it.

Dana DuPerron: Yeah, you can’t just sit back. You should talk about the impact that it will have on the front end. And employers think about what you can do. Make sure you’re asking that question. Make sure you’re doing what you can to help someone find another job.

Jill Lewis: Yeah. Be cautious firing people for cause.

Dana DuPerron: And not providing some of those things like a little bridge to new employment or letters of reference. You want to be careful with letters of reference because you don’t want to be untruthful in them. But you also don’t want to just punish someone unnecessarily or make it more difficult for them to find a job.

Jill Lewis: Exactly. You could be on the hook for that.

Dana DuPerron: Yeah, longer notice period. So that’s that. There you go. Mitigation.

Jill Lewis: Mitigation. All right. Thanks for listening.

 

This content is not intended to provide legal advice or opinion as neither can be given without reference to specific events and situations. © 2021 Nelligan O’Brien Payne LLP.

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