Ontario Human Rights Code protection for law firm partners

November 19th, 2015 by

By Michelle Stephenson

In Swain v. MBM Intellectual Property Law LLP, the applicant, Dr. Margaret Swain, brought an application under Ontario’s Human Rights Code (the “Code”) against the law firm of which she was a founding partner. Swain alleged that the law firm, MBM, had discriminated against her with respect to employment and contract on the protected grounds of gender, family status, and perceived disability.

Swain was one of four lawyers who founded MBM in 1996, and went on to become the Managing Partner of their Vancouver office. She was an equity partner in the firm, and played a crucial role in its establishment and growth. Swain began negotiating her removal from the firm in 2011, which took place over the following two years.

She alleged that as early as December 2010 she was the victim of rumours in the workplace including that she had mental illnesses which impacted her work and relationships, and that she was given special treatment due to her prior marriage to another managing partner. Additionally, she alleged that throughout the process of her removal from the firm, she was discriminated against, as her treatment was effected by consideration of various prohibited grounds under the Code.

The respondents to the application, MDM and two of its managing partners, opposed it on multiple grounds, including that the Human Rights Tribunal did not have jurisdiction because there was no employment relationship between the parties, nor was the applicant being prevented from entering into a contract.

The respondents’ first argument pointed to the last year’s Supreme Court of Canada decision in McCormick v. Faskens Martineau DuMoulin LLP, which stated that McCormick was not protected under British Columbia’s human rights legislation, because she was a partner and therefore not an “employee” of the firm.

In Swain’s case however, the tribunal noted that Ontario’s legislation is broader than that in BC. Specifically, rather than protection applying to “employees,” under Ontario’s Code, the right provided is to equal treatment “with respect to employment.” While this was noted by the tribunal, it was stated that it was not necessary to decide whether Swain specifically was protected under this broader legislative wording, because she was protected from discrimination under the area of contract. Nevertheless, the Tribunal pointed out that human rights legislation is to be interpreted broadly and protection has recently been found in more than just traditional employer-employee relationships. Going forward, it will be interesting to see how this analysis is developed in future applications involving partnerships.

MDM had also argued that, because they were not in the process of entering into a contract and Swain was not prevented from doing so due to discrimination,  the right to “contract on equal terms” was not engaged. However, the Tribunal held that this right is not only present at the formation and termination of a contract, but extends throughout its life. It was once more emphasized that this legislation is to be interpreted liberally, and this protected realm should include the enjoyment of benefits through performance of an existing contract, in this case Swain’s partnership agreement with the other members of the firm.

This is a particularly interesting application of the Code, because it makes the analysis of whether a complaint fits into the employment sphere somewhat unnecessary. While in this case the contract at hand was a partnership agreement, most relationships in the workplace are contractual in nature and it will be interesting to see if, following this decision, more and more human rights complaints in the workplace allege discrimination in the contractual sphere rather than the arguably narrower sphere of employment.

The final argument of the respondents was that this application should be deferred or dismissed altogether due to a concurrent civil claim by Swain, based on the same facts. While the claim was not dismissed, as the civil claim was for breach of fiduciary duties and did not rely on the Code, the Tribunal opted to defer this application until the civil action was resolved, to avoid inconsistent findings and reduce the strain on the parties.

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