Note: Updated on Feb. 21 to incorporate comments from Nelligan O’Brien Payne LLP.
While BlackBerry Ltd. is on track to have its first profitable year since pivoting from smartphone maker to security software developer, a new lawsuit alleges that hundreds of employees have been unfairly prevented from sharing in that success.
On Thursday, Ottawa-based law firm Nelligan O’Brien Payne LLP announced it was launching a class-action lawsuit against BlackBerry on behalf of more than 300 employees across Canada, whom it alleges were denied termination entitlements after the company arranged their transfer to a business partner and, after they had accepted their new terms of employment, informed them they were required to sign letters resigning from BlackBerry.
According to Nelligan O’Brien Payne associate Andrew Reinholdt, the suit is being led by representative plaintiff David Parker, an engineer with 14 years of experience at BlackBerry now being offered a transfer to Ford Motor Company, its partner in the development of in-car software.
“Our understanding is there may be more than 300 employees across Canada who are in the same position as him,” Reinholdt told ITBusiness.ca.
The lawsuit alleges that Blackberry provided the employees in Parker’s shoes with resignation letters that dictated their last date of employment. The lawsuit also stated the transfer of employees did not represent a sale of business, meaning the employees would lose credit for their years of service.
“It’s a termination, but let’s say the Ford transaction didn’t happen – they’d be guaranteed fairly robust entitlements,” Reinholdt said. “As soon as they start with Ford, they go back to zero.”
Reinholdt said his firm is moving forward with the lawsuit at this time because they wanted to ensure other employees who might share Parker’s position and feel pressured to sign resignation letters from BlackBerry would understand what they could potentially lose.
“We’re saying that because BlackBerry’s actions amount to a termination, their employees are entitled to a sum based on either their contract or amounts guaranteed by the Employment Standards Act,” Reinholdt said. “Even though they’ve mitigated the termination by finding their employees new work with Ford, those amounts are payable regardless.”
Or as the firm’s statement put it: “BlackBerry has breached its duties of good faith and honesty, and has knowingly misled the employees. BlackBerry structured this transaction in such a way as to avoid paying these employees their statutory entitlements.”
While no date has been set for the case, Reinholdt said the firm expects to file a statement of claim within 30 days, to which BlackBerry will likely respond.
Nelligan O’Brien Payne is seeking damages that meet Ontario’s, and other provincial minimum statutory entitlements on termination, contractual entitlements on termination, and/or common law entitlements on termination, plus bad faith and punitive damages, and costs.
ITBusiness.ca has reached out to BlackBerry and will update this article if the company responds.