Landmark whistleblower case a warning shot for corporate boards

The message from the court could not be more clear — millions-of-dollars so: if an employee is terminated even partly because they raised compliance concerns, the employer is liable. Full stop. It does not matter how many other reasons are offered after the fact. It does not matter how loudly the company insists the decision was really about "performance" or "fit." Once whistleblowing plays any role at all, the termination is unlawful — and the consequences can be devastating.

This is not another wrongful dismissal case dressed up as a securities dispute. It is a governance case. And boards that treat regulatory compliance as optional, inconvenient or subordinate must take careful note.

Predictably, that mandate put him on a collision course with ownership and the board. When he asked for documentation, pushed for oversight, demanded remediation and insisted on accountability, resistance followed. Meetings were delayed. Requests were deflected. Compliance concerns were minimized. Transparency was treated as a threat.

Eventually, after enough head-butting, he was terminated.

The employer framed it as executive underperformance. The court saw something very different: a company uncomfortable with scrutiny, hostile to governance and unwilling to tolerate a CEO who took regulatory obligations seriously.

Crucially, the court refused to view this as ordinary "executive friction." Instead, it examined how the company was actually run — and what it found was damning. There were missing minutes. No clear resolutions. Documents that should have existed did not. This was not harmless sloppiness. It was evidence.

Poor governance did not just form the background of the dispute. It helped prove retaliation.

One of the most important — and misunderstood — aspects of the decision is this: whistleblower protection does not require external disclosure.

Mr. McPherson never reported the company to the regulator. He did not need to. The law protected him the moment he raised compliance concerns internally and insisted on fulfilling his statutory duties.

That aligns securities law with other areas of employment law. Employees are protected when they assert legal rights, not merely when they file formal complaints. You do not need to pull the pin to be shielded from retaliation. Pointing out the risk and demanding compliance is sufficient.

For boards that assume they can silence a compliance officer before anything "official" happens, McPherson should be unsettling reading.

The employer's central defence was familiar: we would have fired him anyway. Performance issues existed, they argued, and those — not compliance concerns — drove the decision.

The court rejected that outright. Retaliation law is not an either–or. If protected activity played any role in the termination decision, the dismissal is unlawful. Allowing employers to escape liability by pointing to secondary reasons would hollow out whistleblower protection entirely.

This closes a door many employers still try to slip through: rebranding retaliation as performance management after the fact.

The outcome was driven as much by credibility as doctrine. Defence witnesses contradicted themselves. Timelines shifted. Records that should have been produced were not. Compliance reports were said to exist but never surfaced.

Courts are not naïve. When the documents vanish and the story changes, adverse inferences ineluctably follow.

Nor did the court accept the argument that later compliance fixes cured the problem. Cleaning up after firing the person who demanded compliance does not erase retaliation. You cannot shoot the messenger, tidy up later, and call it good governance.

Perhaps the most controversial aspect of McPherson is the remedy. The court awarded more than $5 million under the Securities Act for unlawful reprisal — and then declined to award any wrongful dismissal damages.

In effect, the statutory remedy displaced the traditional notice analysis. The court was blunt: the legislature designed the remedy to punish and deter retaliation, and it had done its job.

That approach raises hard questions. Courts have typically allowed statutory and common-law remedies to coexist. McPherson suggests that when whistleblower damages are substantial they may replace wrongful dismissal damages entirely.

Whether that ultimately strengthens or weakens employee protection will depend on how future courts apply the principle. High statutory awards protect whistleblowers well. Lower ones may not.

The broader implication is unmistakable. Seniority does not cancel statutory protection. Boards cannot hide behind discretion when discretion suppresses compliance. Resistance to regulatory oversight is no longer just bad governance — it can be evidence of unlawful reprisal.

Howard Levitt is senior partner of Levitt LLP, employment and labour lawyers with offices in Ontario and Alberta, and British Columbia. He practices employment law in eight provinces and is the author of six books, including the Law of Dismissal in Canada.