After Acquired Cause Still Matters: Takeaways from Salina v. Investors Group Financial Services Inc.

The decision in Salina v. Investors Group Financial Services Inc. (“Investors Group”) arose from a wrongful dismissal claim brought by Salina, a former long-term employee of Investors Group. The Court’s ruling ultimately reinforces several key principles that favour employers, particularly in cases involving misconduct discovered after termination.

Salina worked with Investors Group for 27 years as an investment advisor, maintaining a large and well-established client base. His employment was terminated with cause in May of 2018 following concerns relating to conflicts of interest, compliance practices, and the handling of internal action plans.

At trial, the Court determined that the employer did not have just cause based on the information available at the time of termination. However, the outcome of the case ultimately turned on what the employer discovered after the dismissal.

Following Salina’s termination, a detailed review of his files revealed serious misconduct that had occurred during his employment. This included the retention of pre-signed client forms, a practice prohibited by Investors Group.  Salina had also completed false compliance attestations confirming adherence to company policies when, in fact, those policies were being violated. This conduct occurred while Mr. Salina was already under close regulatory supervision.

The Court found that this misconduct was fundamentally incompatible with the level of trust and integrity required of an investment advisor. In particular, the combination of breaching established rules and falsely certifying compliance was viewed as a serious form of dishonesty that undermined the very core of the professional relationship.

The Court found that the misconduct, though discovered after termination, would have justified dismissal with cause and without notice had it been known during employment and at the time of termination. This case highlights the significance of after-acquired cause: the employer was able to rely on misconduct uncovered after termination, which was sufficient to defeat the claim even though the reason it had fired for cause originally was not upheld.

From an employer standpoint, this aspect of the decision is particularly important. It confirms that an employer is not limited to the reasons relied on at the time of termination. Misconduct found after dismissal may still form a complete defence. This provides employers with a safeguard, particularly in situations where internal investigations uncover additional issues following an employee’s departure.

The decision also reinforces the central importance of honesty and regulatory compliance, particularly in industries where employees are entrusted with significant responsibility and operate within strict professional frameworks. The Court made clear that misconduct involving dishonesty, especially where it relates to internal controls or regulatory obligations, can justify termination without notice, regardless of an individual’s tenure or prior performance.

Equally significant is the Court’s reliance on the employer’s internal policies and compliance systems. Investors Group maintained clear policies prohibiting the use of pre-signed forms, and Salina had repeatedly acknowledged these requirements through formal attestations while knowingly breaching them. These policies, and the employees’ documented commitment to follow them, played a central role in establishing the seriousness of the misconduct. The decision shows that well-drafted, clearly communicated workplace policies can carry substantial legal weight and form the foundation of a successful defence. It is an interesting thought experiment to consider whether this would have also constituted wilful misconduct within the meaning of Regulation 288/01 of the ESA in Ontario. The author believes that it would.

The Court also upheld the enforceability of contractual protections. It was found that Salina did breach both non-solicitation and confidentiality provisions by contacting former clients and retaining confidential client information after termination. While damages were not awarded due to a lack of evidence linking the breaches to financial losses, the findings confirm that such provisions remain valid and enforceable when properly structured.

Ultimately, Salina v. Investors Group Financial Services Inc. confirms that employers can rely on documented compliance measures, internal policies, and contractual protections to support termination decisions. It also affirms that serious misconduct discovered after the fact can play a determining role in defending a dismissal and can defeat a claim entirely, even if it was not originally asserted or even known at the time of dismissal. Essentially, wrong is wrong no matter when it is discovered.

If you suspect that employees are knowingly breaching your policies, especially in a strictly regulated workplace, give one of our employment lawyers a call.