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In the Spirit of Partnership: Human Rights Tribunal Extends Protection to Law Firm’s Equity Partner

The Supreme Court of Canada already decided that an equity partner of a law firm in British Columbia was not entitled to protection under that province’s human rights legislation (McCormick v. Fasken Martineau DuMoulin LLP, 2014 SCC 39 (CanLII)).  So it might be a bit surprising to hear that the Human Rights Tribunal of Ontario just came to the opposite conclusion.

In a recent interim decision known as Swain v. MBM Intellectual Property Law, LLP, Randy Marusyk, and Scott Miller, 2015 HRTO 1011, the Tribunal heard the complaint of Dr. Margaret Swain, a founding partner of a law firm specializing in patents and intellectual property law.  Dr. Swain complained that the firm’s four equity partners became deadlocked in opposition, with two of the partners – one of whom was her former spouse – perpetuating rumours throughout the firm that she had certain psychological illnesses which impacted her performance and relationships in the office, and that she had derived special benefits because of her status as the former spouse of another equity partner of the firm.

Dr. Swain alleged that by May 2011, she and one other equity partner were being excluded from all firm management decisions.  Despite indicating a willingness to negotiate an exit from the partnership, the relationship simply deteriorated, and Dr. Swain eventually brought civil actions in British Columbia, as well as her Human Rights complaint in Ontario.  In part, her Human Rights complaint alleged that the rumours tainted the process of removing her from the partnership, and amounted to discrimination in employment on the basis of gender, family status, and perceived disability contrary to s.5 of the Code, as well as a violation of s.3 of the Code, which provides: "Every person having legal capacity has a right to contract on equal terms without discrimination because of race, ancestry, place of origin, colour, ethnic origin, citizenship, creed, sex, sexual orientation, gender identity, gender expression, age, marital status, family status or disability."

The respondents requested that the Tribunal dismiss the application outright for lack of jurisdiction pointing to the McCormick decision noted above.  The respondents argued both that Dr. Swain was not an “employee” and therefore had no protection under s.5 of the Code, and also that Dr. Swain could not point to any specific contract term as being discriminatory, and so that she had no grounds to see protection under s.3.

The Tribunal rejected the respondents’ requests, both with respect to s.3 and s.5 of the Code.

The Tribunal stated that Ontario is one of four Canadian jurisdictions with Human Rights legislation providing protection under the social area of “contracts” and that it would be “improper as a matter of statutory interpretation to read limitations into the Ontario Code.”  Accordingly, the fact that Dr. Swain could not point to any discriminatory clause in the firm’s partnership agreement, was not an impediment to her invocation of s.3.  The Tribunal noted that it has, in the past, engaged the “right to contract” to include the formation, duration, and termination of a contract.  Accordingly, discrimination during the life of a contract is protected, and the policies, practices, and systems that relate to a contract are open to scrutiny by the Human Rights Tribunal of Ontario under s.3 of the Code, and the respondents’ request to have the complaint dismissed on that ground was denied.

Further, the Tribunal saw fit to depart from the Supreme Court’s analysis in McCormick.  It noted that in McCormick, the Supreme Court recognized that British Columbia’s Human Rights law defines who is an “employee” who is entitled to protection.  In Ontario, protection extends to not the “employee” relationship, but to the social area of “employment”, which is a much broader category such that s.5 has been applied to different contexts including: volunteers, employer’s clients, hiring halls, and personnel agencies, where complainants may not be “employees” per se.

Accordingly, in its preliminary decision, the Tribunal rejected the respondents’ position that it does not apply, allowing the parties to present evidence and argument on the issue at a hearing on the merits.

Employers should be aware that the Tribunal will not refuse to hear a complaint of discrimination in the area of employment, just because the complaining party is not an employee.  It is not yet clearly defined by any bright line test who is and is not protected by s.5 prohibiting discrimination in employment, and there may never be, but the Tribunal has made it clear that a person does not need to be an “employee” to seek that protection.  It appears that any person who does have the authority for decision making and control over the terms on which they provide work may have protection under s.5, which is a broad and liberal interpretation of that section.

If you have any questions regarding who may constitute an employee, or where an existing contract or agreement may be susceptible to Human Rights complaints, you may wish to speak with any of the experienced lawyers at CCPartners.