Nufrio v. Allstate Insurance Company of Canada
In this matter Ken was co-counsel with Kristopher Stone and represented a plaintiff, Mr. Nufrio, in a wrongful dismissal lawsuit against his former employer, Allstate Insurance Co. of Canada.
Mr. Nufrio was employed as an insurance agent from February 28, 1985 to November 6, 2008. During his employment, Allstate changed its compensation and sales distribution model on several occasions. The last of these changes was to become effective on September 1, 2009.
Even though he was given notice of the upcoming change and his income was guaranteed, Mr. Nufrio was terminated on November 6, 2008 with Allstate alleging he was terminated for cause as a result of not accepting the latest changes that were to take effect on September 1, 2009.
Mr. Nufrio’s position at trial was that he was terminated without cause. His first written employment contract was entered into on May 5, 1998. A later agreement made amendments to the first agreement with respect to business location, compensation, and insurance products.
On July 24, 2007, Allstate made an announcement that it was changing its business mode. Mr. Nufrio was advised that he would be a “Business Development Agent” and was later told that he would work in a new office at a new location. This further changed the initial employment contract Mr. Nufrio had with Allstate.
Mr. Nufrio did not accept the latest round of changes and attempted to negotiate with Allstate. His position was that the new changes fundamentally altered how he would sell Allstate’s products and importantly, how he was compensated.
He asserted that his rights were governed by the earlier agreement he had with Allstate before the change that was announced on July 24, 2007.
Allstate took the position that Mr. Nufrio was given a lot of notice of the upcoming change, that the only effective change was his new location, and that Mr. Nufrio would no longer have to pay his own office expenses.
The Honourable Justice Pollak considered the facts and found that Allstate had the right to impose new terms of employment on Mr. Nufrio because he had reasonable notice of those changes and that Allstate had just cause to terminate Mr. Nufrio’s employment:
“40 I agree with Allstate’s submissions that it had the right to impose the new terms of employment on Mr. Nufrio because he had reasonable notice that those changes in his employment terms would be made and there is no evidence that he lost any compensation during the transition period. Further, there is no evidence that there is anything unlawful or untenable about the new terms of employment.
41 In fact, Mr. Nufrio received top-ups pursuant to the guarantees on his income during the transition period. An employer has the right to decide what terms of employment it is prepared to offer its employees. It cannot change terms of employment without giving an employee appropriate notice of the changes. Allstate did so in this case. Mr. Nufrio did not have the right to insist on employment terms he wanted.
42 For the reasons that I have referred to above, I find that Allstate had just cause to terminate Mr. Nufrio’s employment.”
Justice Pollak also ordered Mr. Nufrio ordered to pay $60,000 in costs for the trial to Allstate based on agreement negotiated at trial.
In addition to losing his case, Mr. Nufrio had to pay his former employer $60,000 for the trial.
Mr. Nufrio appealed to the Ontario Court of Appeal. The earlier decision of Justice Pollak was reversed:
“4 The trial judge found that the appellant was properly terminated for cause on November 6, 2008. In her view, the respondents had the right to impose the new terms of employment, since the appellant had been given reasonable notice of the changes.
5 In our view, the trial judge erred by not addressing the question of whether the change in location, including the change to the business model under the NOA, could be made by the respondents during the working notice period. She also erred by not considering whether the NOA precluded them from unilaterally requiring the changes to the appellant’s business model and location.
8 We agree with the appellant’s submissions. The proposed relocation was more than a geographic relocation of the appellant’s office; rather, it was a fundamental change to the business model that had been agreed to under the NOA.
9 The appellant was entitled to continue to operate in accordance with the 830 agreement and the NOA during the period of working notice to September 1, 2009, as had been set out in the respondent’s July 2007 letter. The NOA precluded the respondents from unilaterally imposing the changes during the period of working notice.
10 Accordingly, the appellant is entitled to compensation for the balance of the notice period from November 6, 2008 to September 1, 2009, a period of nine months and 25 days. We agree that it is to be calculated on the basis of $20,000 per month.
11 Further, it is clear from a plain reading of the 830 agreement that any compensation interest the appellant had in renewed insurance policies ended with the termination of his employment, despite his argument to the contrary.
12 Accordingly, the appeal is allowed in part. Costs to the appellant fixed at $7,500 for the appeal and $60,000 for the trial, both are inclusive of disbursements and applicable taxes.”
Mr. Nufrio was successful on appeal even though he lost at trial. There was no just cause for his dismissal.
This case illustrates the significant risk parties face when advancing a case through the Courts. If they do not settle their case and it is heard in Court, the party that loses will likely have to pay the costs of the winning side in addition to the costs of the party’s own lawyers.
This case also shows that even if a party loses at trial, the lawsuit is not over if the losing party appeals the original decision. Also, a costs award by the Ontario Superior Court of Justice can also be appealed and over turned.
Ken and Kris were successful in arguing that there were fundamental changes to Mr. Nufrio’s employment with Allstate, which therefore removed Allstate’s argument that there was just cause for termination as Mr. Nufrio did not comply with the changes. The decision of Justice Pollak was reversed and the costs of the trial in the amount of $60,000 and of the appeal in the amount of $7,500 were ordered to be paid by Allstate to Mr. Nufrio.
Nufrio v. Allstate Insurance Co. of Canada, 2016 CarswellOnt 10224, 2016 ONSC 2791,  O.J. No. 3401
Nufrio v. Allstate Insurance Co. of Canada, 2016 CarswellOnt 13993, 2016 ONSC 4944, 270 A.C.W.S. (3d) 260
Nufrio v. Allstate Insurance Company of Canada, 2017 CarswellOnt 19243, 2017 ONCA 948, 2018 C.L.L.C. 210-024