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HOOKERS AND THE WORKPLACE MAY NOT BE A GOOD MIX

A newspaper headline last week read, “German Company Rewards Employees With Hooker Party”. Maybe it’s just me, but it seems pretty obvious that prostitutes and the workplace aren’t likely to be a good mix.

Published reports explained that a German insurance firm held a staff party which saw salesmen rewarded with the services of prostitutes. The company staged the “raucous” event at Gellert Thermal Baths in Budapest, Hungary.

That historic building was transformed into an “open air brothel” and 20 or so prostitutes were hired. The party was held to reward the company’s most successful salesmen and taking photos at the event was apparently strictly forbidden.

Needless to say, these revelations generated some reaction. A spokesperson for the company stated that the organisers of the party have now left the company and that this was “not the usual way of rewarding their employees” (however, it was reported that many of the executives present at the party may still be working for the company).

While this sort of thing is understandably rare, it isn’t necessarily limited to far-away places like Hungary. In 2006, the Alberta Court of Queen’s Bench dealt with a case bearing some similarities to that situation.

It involved RBC Dominion Securities and a vice president and investment advisor, Whitehouse. He was a highly ranked, and highly paid ($424,500 per year in commissions) employee with RBC’s Calgary office.

After having been out drinking one evening, Whitehouse brought a prostitute into RBC’s offices. He used his security pass to enter the building and to utilize the elevator to RBC’s premises. She consumed cocaine in RBC’s washroom and the two then headed for Whitehouse’s office.

At some point, an argument broke out between them over payment. With no resolution to that dispute, Whitehouse departed, leaving the prostitute alone in RBC’s lobby area.

Having been left alone inside the premises, the woman would have had easy access to files and papers. Whitehouse subsequently returned to the building, but the prostitute had since departed.

In the Court’s words, Whitehouse’s late night indiscretion rapidly became a public spectacle the next day. The prostitute reappeared at RBC’s offices, revealed the events of the previous evening, and demanded payment.

The whole, bizarre, scene quickly turned into an investigation. RBC’s security system, both videotape and the data from the security pass reader, produced proof supporting the prostitute’s story. Whitehouse initially denied any involvement but later made an admission after being confronted with incontrovertible security system evidence.

It also came out in the investigation that Whitehouse had engaged in similar indiscretions in RBC’s offices on other occasions. RBC dismissed Whitehouse, summarily, for just cause reasons and he sued for wrongful dismissal.

The Court considered Whitehouse’s conduct, calling it “arrogance or disdain for his employer’s expectations” of him as an employee. It stated he “exhibited a contempt for his employer, his co-workers, and their respective reputations in the business community” and concluded he showed a “serious lack of judgment”.

The Court focused to some degree on the fact that Whitehouse had left the prostitute, unaccompanied, in RBC’s offices with access to whatever client or corporate information was in the vicinity. This showed a “reckless disregard for his clients’ interests”.

It was also significant that Whitehouse compounded the seriousness of his misconduct when he lied about it to his employer. All of this led the Court to determine that what his conduct portrayed was “a lack of integrity, a deficient judgment, dishonesty, untrustworthiness and a careless disregard for client and corporate confidentiality”.

The employer made out its defence of just cause for summary dismissal. This case serves as a reminder that, however unreachable the just cause standard may sometimes seem, courts will occasionally agree that egregious conduct (even just a single occurrence) warrants summary dismissal.

And, if employee misconduct involves obtaining the services of a prostitute, the chances of that happening seem substantially greater (at least in Canada).

Robert Smithson is a labour and employment lawyer, and operates Smithson Employment Law in Kelowna. For more information about his practice, or to subscribe to You Work Here, visit www.smithsonlaw.ca. This subject matter is provided for general informational purposes only and is not intended as legal advice