Lessons from the disputed dismissal of a long-time McDonald’s employee
By Howard Levitt
Going through the motions of a performance improvement plan may seem an easy fix, but, as a McDonald’s franchisee recently learned, the employer can still find itself liable for substantial severance.
For more than 25 years, Esther Brake worked for McDonald’s restaurants. A substantial part of her career was spent with PJ-M2R Restaurants, a McDonald’s franchise holding company with several restaurants in Ottawa. She received regular accolades for having met or exceeded her employer’s expectations.
One year, Brake received a negative performance review. This came as a shock. In all of her years of service, she had never had any inkling that her performance was anything less than commendable, much less that her position would be in jeopardy.
But the die was cast. The employer’s owner, Perry McKenna, proceeded to advise her that she would be transferred to its Walmart location in Ottawa. That branch had a high staff turnover, one of the lowest national rankings for customer service, and was trending badly.
Although that seemed a recipe for abject failure, McKenna insisted that someone with Brake’s experience could turn around a restaurant like that.
Brake’s response was to invest 12 hours every day of the week without seeking overtime. It was all for naught. After 4 months, she was summoned to a review meeting when she received another unsatisfactory rating. As a result, she was placed on a McDonald’s performance improvement program which would evaluate her against various criteria at 90 and 180 day intervals.
Despite having attained her 90 day goals, the employer still treated her as a failure. It gave her a final choice: take a demotion to First Assistant or go. Brake was aghast: to accept the new role meant that she would be reporting to staff whom she had trained and supervised and who were much younger and less experienced than her. After Brake refused, she was fired for just cause. She, in turn, sued PJ-M2R for wrongful dismissal.
Siding with Brake, Justice Kevin Phillips of the Ontario Superior Court ruled that while she probably was not a perfect employee in every respect, the issues in her performance did not warrant dismissal. Brake had built up such a lengthy history of effective contributions and outstanding work ethic she was entitled to fairness and reasonable assistance in meeting expectations.
Because the difficulties at the Walmart location preceded Brake’s arrival and involved circumstances outside her exclusive control, the expectations of her were impossible to meet. Her removal from her managerial position was found to be a foregone conclusion even before she finished the performance plan. Incensed by her treatment, the court awarded Brake 20 months of notice and legal fees.
The messages to employers in managing staff who are not performing to standard are direct:
1. Consider the employee’s length of service: a long-term employee will be provided more slack than an employee of short duration.
2. Review the employee’s record: Has the employee received stellar reviews? If so, the trajectory to prove gross incompetence will be longer and steeper.
3. Prescribe realistic standards and timelines: Courts will see through unattainable expectations and view them as setting up an employee for failure.
4. Stick with the timelines: The court was critical of the employer in Brake’s action because it ignored review milestones in the performance plan.
5. Honestly assess performance: Once again, the court upbraided the employer for disregarding the fact that Brake had actually exceeded the performance requirements during a critical period of review.
6. Offer realistic alternatives: Giving an employee a choice of a demotion or being fired for poor performance is an invitation to litigation. If you have no cause, then a demotion is no solution.