One to watch – Drug testing case at Alberta CA

The Alberta Court of Appeal heard the Kellogg Brown & Root drug testing appeal on October 11th and has reserved judgement. The case will give Alberta’s highest court an important opportunity to consider the circumstances in which casual drug users are protected under human rights legislation based on the perceived disability doctrine. This has been an issue that has caused some uncertainty since the Ontario Court of Appeal’s landmark Entrop v. Imperial Oil judgement in 2000.

Kellogg Brown & Root is about an employee who was terminated 10 days into employment after a pre-employment drug test came back positive for cannabis. He was never impaired at work and testified that that he was only a casual marijuana user. In 2005, an Alberta Human Rights Panel dismissed the employee’s complaint because it was not based on any real or perceived disability and, alternatively, because the testing policy was not reasonably necessary.

In June 2006 the Alberta Court of Queen’s Bench reviewed all of the case law on perceived disability and acknowledged that there is a “difference of opinion” over the right of casual drug users to protection from discrimination. In the end, it chose to adopt the approach taken in Entrop, which allows for a finding of prima facie discrimination based on the circumstances in which the relevant distinction is made. As in Entrop, the Court held that the complainant was treated as if he was drug dependent and likely to report to work impaired. Recall that the policy in Entrop explicitly stated, “In the cycle of substance abuse, users frequently experimenting with drugs progress to the dependent user state later on.” The Court held that this approach to casual users could be implied in any zero tolerance policy and (criticizing a significant Canadian Human Rights Tribunal decision called Milazzo) held that an employer cannot defend against a discrimination claim by proving a subjective belief that the complainant was a casual user.

The Court then held that pre-employment testing was not reasonably necessary to satisfying the objective of “prohibiting workplace impairment.” Its reasoning is summarized in the following sentence: “While there is a rational connection between impairment and job performance, the link between a positive pre-employment urine test and workplace impairment is tenuous and uses predictions based on statistical risk to bar particular people.” More significantly, the Court suggested a number of ways by which the employer could have built a standard which was more accommodative and better connected to the goal of prohibiting (by predicting) workplace impairment.

Incidentally, and implicitly recognizing that the prima facie discrimination analysis in drug testing cases is tortuous, the Court commented that its okay that human rights legislation may be doing “the work of privacy rights.” Since Alberta employers are subject to employment privacy legislation (the Alberta Personal Information Protection Act) and since Oil Sands employers are clearly applying strict drug testing policies, we might expect a statement on drug testing from the Alberta Information and Privacy Commissioner in the near future. In fact, a PIPA complaint was filed against Kellogg Brown & Root that was recently dismissed on jurisdictional grounds. Until the Privacy Commissioner gets his chance to speak, the Kellogg Brown & Root Alberta Court of Appeal case is the one to watch.

Case Report – Duty to mitigate weighs against preservation of evidence

In this October 5th Ontario Superior Court of Justice decision, Patillo J. held that a party’s duty to mitigate loss weighed against its duty to preserve relevant evidence.

The case is about damage to high-priced Persian carpets caused while they were under the defendant’s carriage. The defendant made two claims of spoliation, both of which were rejected.

First, the defendant asked that an adverse inference be drawn because the plaintiff could not produce records of similar carpet purchases. Patillo J. disagreed with the defendant’s assertion that the missing records would have been evidence of the value of the carpets that were damaged and rejected its request.

The defendant also claimed that evidence of damage to the carpets was unavailable because the plaintiff sold the carpets shortly after it delivered them into the plaintiff’s possession. Patillo J. held that the dispute was live when the carpets were still in the defendant’s possession. Moreover, he held that the plaintiff was blameless for selling the carpets because it had a duty to mitigate and put the defendant on notice of its mitigation plans:

In my view the presumption does not arise in this case in respect of the carpets. KLM submits that the issue of discoloration and whether the damage to the carpets was irreparable only arose in December 2000. In my view it was clear that the issue of damage to the carpets was one that had been in existence from the time that the carpets were returned by the US Customs Authority in April 2000. Following their return, KLM had the carpets in its possession for many months before World of Art reclaimed them. It retained Mr. Mekhael, its carpet expert, in April 2000 for the express purpose of determining the extent of the damage to the carpets. He looked at the carpets on at least two occasions before December 2000. He had ample time to inspect the carpets and document their condition.

Mr. Ziai testified that he thought Mr. Mekhael wanted to put chemicals on the carpet to test it and that is why he refused permission for testing on December 1, 2000. On December 2 and 3, 2000, after Mr. Mekhael had been refused permission to test a carpet, the carpets were put on public auction by World of Art. KLM’s lawyers were present at the auction. There was nothing to prevent KLM from buying a carpet if it felt it was necessary. The offer to purchase it made on December 8, 2000, was not firm in that it contained no specific price. In any event, if testing of the carpets was so important to KLM, it still had time to move in the Action for an order to preserve property and/or to test. World of Art and Mr. Ziai were proceeding to mitigate World of Art’s damages by selling the carpets. KLM knew that but took no steps to secure a carpet for testing beyond its general offer to purchase. In the circumstances, I am hard pressed to understand how the presumption in respect of spoliation arises.

Ziai v. Maatschappij (KLM Royal Dutch Airlines), 2007 CanLII 41896 (ON S.C.).

It really is all about information

I reported on the substance Supreme Court of Canada’s Vancouver Sun decision from last Thursday here, but also have to say how much I liked Bastarache J.’s opening line:

Information is at the heart of any legal system. Police investigate crimes and act on the information they acquire; lawyers and witnesses present information to courts; juries and judges make decisions based on that information; and those decisions, reported by the popular and legal press, make up the basis of the law in future cases.

Right on! Now all this blog needs is a theme song.

Case Report – SCC says informer privilege absolute

In a judgment released October 11th, the Supreme Court of Canada weighed the interest protected by the informer privilege against the interest in open courts. An 8 – 1 majority held that informer privilege is an absolute bar on the disclosure of an informer’s identity subject only to the innocence at stake exception.

The majority strongly affirmed the mandatory character of the informer privilege. Writing for the majority, Bastarache J. said:

The informer privilege rule is mandatory (subject only to the “innocence at stake” exception). To permit trial judges wide discretion in determining whether to protect informer privilege would undermine the purposes of the rule. Part of the rationale for a mandatory informer privilege rule is that it encourages would-be informers to come forward and report on crimes, safe in the knowledge that their identity will be protected. A rule that gave trial judges the power to decide on an ad hoc basis whether to protect informer privilege would create a significant disincentive for would-be informers to come forward, thereby eviscerating the usefulness of informer privilege and dealing a great blow to police investigations.

Despite this forceful position, the majority did leave open the possibility that the rule might be the subject of a Charter challenge. It was disinclined, however, to embark on a constitutional analysis in the circumstances because the appeal was of a discretionary order.

The core of the majority judgement is directed at how the judiciary should operationalize the privilege, for even though the privilege must always be respected it is clear that a judge also has a duty to apply it in a manner that minimally impairs the open court principle. The majority recognized that meeting this duty can be challenging for judges because the parties will frequently consent to an in camera process.

In recommending a model process to assist judges in meeting this challenge, the majority held that:

a judge can appoint an amicus curiae for the limited purpose of addressing whether the evidence supports the conclusion that a person is a confidential informer
the media does not have standing to address this question
the media may have standing after the privilege has been established in a second hearing to address the issue of minimal intrusion
members of the media should be provided with notice rather than be hand picked
whether notice to the media is given is a matter of the judge’s discretion
the media should not be provided with identifying information and, more generally, should only be provided with information essential to making an argument

LeBel J. was the lone dissenter. Unlike the majority he framed the contest as between a constitutionally-protected principle (open courts) and a judge made rule that promotes the administration of justice (the informer privilege). He held that an absolute rule was not warranted because the privilege is not an end in and of itself. He also suggested that the majority should have embarked upon a constitutional analysis even though a Charter challenge to the common law rule was not formally made. Given the qualifier made by the majority, LeBel J. may some day get another chance to make his point.

Named Person v. Vancouver Sun, 2007 SCC 43.

One to watch – Blood Tribe at the SCC

The Supreme Court of Canada is scheduled to hear an appeal of Blood Tribe Department of Health v. Canada (Privacy Commissioner) on February 21, 2008. The case will present an opportunity for the Court to comment on a principle it first articulated in 1982 in Descoteaux v. Mierzwinski – that laws authorizing interference with solicitor-client privilege must be interpreted restrictively. Of perhaps greater interest, it will be the Court’s first opportunity to provide significant commentary on the Personal Information Protection and Electronic Documents Act.

The dispute arose when the respondent to a complaint alleging a failure to provide access to personal information refused to produce records of communications that it claimed to be subject to solicitor-client privilege. In demanding the records be produced, the Commissioner relied on the investigatory powers granted by section 12 of PIPEDA, a broadly-worded provision which does not expressly grant the power to order the production of records over which solicitor-client privilege is claimed.

Litigation ensued and the Federal Court held that the Commissioner had the power to order production. It did so by applying a purposive analysis, stressing the Commissioner’s “central role in achieving the important objectives of the legislative scheme.”

The Federal Court of Appeal disagreed with the lower court’s approach, which it found to be inconsistent with the Mierzwinski strict interpretation principle and the concept of solicitor-client privilege as a substantive rule of law. It stated:

In short, the reason express language is required to abrogate solicitor‑client privilege is because it is presumptively inviolate. The exception for solicitor‑client privilege in the PIPEDA is not what shelters privileged documents from disclosure. The law of privilege does that. The exception simply recognizes that privilege.

There are some finer points to the Federal Court of Appeal’s decision that may also catch the Supreme Court’s interest, including (1) whether the principles developed in interpreting the federal Privacy Act should be applied in interpreting PIPEDA and (2) what effect should be given to language authorizing the exercise of powers “to the same manner and to the same extent as a superior court.”

Blood Tribe is likely to remain relevant given that Parliament’s Standing Committee on Access to Information, Privacy and Ethics made a rather moderate recommendation in its recent Statutory Review of the Personal Information and Electronic Documents Act. Asked by the Privacy Commissioner to address the gap to her investigatory powers identified by the Federal Court of Appeal in Blood Tribe, the Standing Committee only recommended that PIPEDA be amended to expressly permit her to apply to the Federal Court for an expedited review of solicitor-client privilege claims.

Case Report – IPC asserts jurisdiction to scrutinize exclusion claim

In the first case to consider the new exclusion for research-related records in the Ontario Freedom of Information and Privacy Act, the IPC held that it has jurisdiction to order production of records claimed to be excluded and otherwise inquire into the claim. The University had resisted production of records in four requests where the research-related nature of the records was clear on the face of the requests.

Interim Order PO-2601-I, 2007 CanLII 39194 (ON I.P.C.).

Case Report – Investigator to suspect duty of care recognized by SCC

On October 4th, a 6-3 majority of the Supreme Court of Canada held that an investigating police officer owes a private law duty of care to the suspect under investigation. This is a duty of care case and not directly about information and privacy. There are, however, a couple of points of significance to readers of this blog.

First, investigations obviously involve the collection of personal information, and the new duty will inform such collections. Unlike section 8 of the Canadian Charter of Rights and Freedoms, which only operates to restrict the collection of information, the new duty could conceivably require its collection. In fact, in this case one of the allegations was that the police breached their duty of care by failing to re-investigate after receiving exculpatory evidence after charges were laid. Based on the majority’s reasoning, there is no reason why a private investigator or a member of a company’s audit or security staff would not be found to be subject to an analogous duty quite apart from any factors related to the underlying relationship between the investigator’s principal and her suspect.

Second, this is the first time the Supreme Court of Canada has commented on the important Jane Doe duty to warn case, which was relied upon by the majority (of five judges) at the Court of Appeal in recognizing the new duty. Writing for the majority of the Supreme Court, McLachlin C.J.C. said that Jane Doe was not analogous and noted that there is significant debate over the content and the scope of its ratio. For the minority, Charron J., went further and explained:

Hence, the trial judge in Jane Doe held that where the police are aware of a specific threat to a specific group of individuals, the police have a duty to inform those individuals of the specific threat in question so that they may take steps to protect themselves from harm. As Moldaver J. (as he then was) said, speaking for the Divisional Court in confirming that the action could proceed to trial, “[w]hile the police owe certain duties to the public at large, they cannot be expected to owe a private law duty of care to every member of society who might be at risk”: Jane Doe v. Metropolitan Toronto (Municipality) Commissioners of Police (1990), 72 D.L.R. (4th) 580, at p. 584. Hence, Jane Doe cannot be read to stand for the wide proposition that the police owe a general duty of care to all potential victims of crime. Such an interpretation would ignore the fact that there must be more than mere foreseeability of harm before a duty of care will arise; there must also be sufficient proximity between the parties and the absence of policy considerations negating the existence of any prima facie duty of care.

Hill v. Hamilton-Wentworth Regional Police, 2007 SCC 41.

Case Report – Pornographic images to be preserved but not produced

On October 2nd, the U.S. District Court for the District of Columbia ordered a plaintiff in a harassment suit to preserve six pornographic images portraying homosexual acts and allow one of the defendant’s lawyers to inspect the images.

Magistrate Judge Facciola accepted that the images were relevant to the defendant’s claim that the alleged harassment was “unwelcome.” (The test for harassment under Canadian law also includes a subjective component.) In the his view, however, relevance alone did not justify production because of the plaintiff’s competing privacy interest and because the images would not clearly be admissible at trial. In response to the defendant’s argument that a party to litigation is entitled to the production of evidence that is “reasonably calculated to lead to the discovery of admissible evidence,” Magistrate Judge Facciola held that the defendant’s purpose for seeking the images (which was to admit them as evidence of the plaintiff’s own standard of behaviour) meant that the issue of discoverability and the issue of admissibility were inseparable.

Smith v. Cafe Asia (2 October 2007, Dist. Ct. D.C.).

Case Report – Fiduciaries may prepare to depart

There is a line of case law in which Canadian courts have held that “ordinary employees” can take steps in preparing to compete post-departure without violating their duty of loyality and fidelity. In this August 17th Saskatchewan Court of Appeal cause case, the court held that fiduciaries may also take such preparatory steps provided they do not usurp a corporate opportunity or otherwise breach the trust upon which their fiduciary status is based. In other words, evidence of preparation alone is not enough to prove a breach. The court said:

Applying the case law to these activities, the trial judge did not err in saying that Mr. Fleming did not breach the fiduciary duty owed to his employer. The steps taken were of an exploratory nature only and fall easily into the category of contemplation and casual discussions with others. I reach this conclusion even though these were activities that would have resulted in a business capable of competing directly with Ryly’s, if they had come to fruition. To use Professor Flannigan’s analysis, however, Mr. Fleming did not reach the point of opportunistically diverting his employer’s resources to his or her own self interest rather than for the limited purpose authorized by the employer. No resource belonging to the employer was used in Mr. Fleming’s activities.

Calyniuk Restaurants Inc. v. Fleming, 2007 SKCA 85 (CanLII).

Case Report – Employer owns mixed contact list stored on its system

In this United Kingdom departing employee case from this June, the High Court held that an employer had exclusive ownership of a contact list alleged by an employee to be his personal contact list because it was maintained on its computer system.

The defendant was a journalist who worked in trade publication and conference buisnesses for a number of years before joining the claimant, who operated a similar business. He gave evidence that he maintaned a personal contact list, updated it from time to time, and had over eight years of editorial and industry contacts amassed when he commenced employment with the claimant. Nine years later, and after transferring the list to an MS Outlook database maintained by the claimant and adding work-related contacts, the defendant left with two other employees to start a competing business. In addition to suing to recover damages for the defendant’s pre-departure breach of loyalty and fidelity, the claimant disputed his ownership of the list.

Although it held that the company had not effectively incorporated its computer use policy into the defendant’s contract of employment, the court nonetheless found it had exclusive ownership of the list. It made the following broad statement:

I am satisfied that where an address list is contained on Outlook or some similar program which is part of the employer’s e-mail system and backed up by the employer or by arrangement made with the employer, the database or list of information (depending whether one is applying the Database Regulations or the general law) will belong to the employer…

In all those circumstances, I find that such lists will be the property of the employer and may not be copied or removed in their entirety by employees for use outside their employment or after their employment comes to an end.

Because this is not likely to be appreciated by many employees, it is in my judgment highly desirable that employers should devise and publish an e-mail policy…

In the absence of such a laid down policy, I next have to consider the status of contact details which have been put on to an employer’s system by an employee for their own use outside their employment, in ignorance of the fact that they would thereby become part of the Claimant’s property…

In my judgment it is reasonable to imply in the absence of any laid down guidance a term that an employee will at the end of their employment be entitled to take copies of their own personal information and, where the information is person [sic.] and confidential to them, such as details of their doctor, banker or legal adviser, to remove them from the employer’s system.

Most forms of e-mail system will permit the creation of compartmentalised address books, so that ordinarily an employee will be able to put their own personal contact details of friends, relations, and the like into a personal address book. In those circumstances, in the absence of clear evidence of an e-mail policy, I would be inclined to the view that ownership of that part of the database resided with the employee…

In assessing the facts, the Court held that the defendant copied the entire mixed list for the purpose of competing with the defendant and that it would not be appropriate for it to parse the list. It ordered the sequestered database to be delivered up to the claimant and enjoined the defendant from using it except for contact information “known by other means.”

Pennwell Publishing (UK) Ltd v. Ornstien, [2007] EWHC 1570 (QB).