What is a whistleblower?

Simply put, a whistleblower is someone who reports wrongdoing or misconduct. While the person may report this wrongdoing or misconduct to their supervisors or employers, they may also report these concerns to others such as certain regulators, the government or even the police. There exists a variety of pieces of legislation that deals with whistleblowing. However, in the case we discuss below, the whistleblowing is in the securities context. 

So, what happens when a whistleblower employee raises concerns about certain activities or protocols that run afoul of their professional and regulatory requirements? What happens when the employer decides to terminate the employee as a result of the employee’s raising such concerns? What happens if the employer’s decision to terminate the employee is informed (at least in part) by the employee’s concerns?

The case

In the decision of McPherson v. Global Growth Assets Inc., 2025 ONSC 5226, the court had the chance to address this very issue, ultimately making the determination that the dismissal of a particular employee was motivated, at least in part, by a protected activity and constituted an act of reprisal contrary to Part XXI.2 of the Ontario Securities Act, R.S.O. 1990 c. S. 5 (“Securities Act”). The anti-reprisal provisions under review originated as part of an omnibus budget bill in 2016 which incorporated into the legislation protections from reprisal provisions that came into force in July 2016.

Background

In this case the plaintiff was hired by Global Growth Assets Inc. and Global RESP Corporation (cumulatively, “Global”) and held the role of CEO and Ultimate Designated Person (“UDP”). Under Ontario’s securities law, registered firms are required to have a UDP who is responsible for promoting compliance in the firm with various regulatory requirements. Following a removal of a subordinate from the plaintiff’s oversight, the plaintiff complained that it resulted in a breach of his responsibilities as UDP. The plaintiff requested in camera meetings with the Global’s independent board members warning them that there would be consequences if the board could not explain why his subordinate was no longer reporting to the CEO and UDP. Instead of providing an in camera meeting, Global proceeded to terminate the plaintiff on a without cause basis. 

The plaintiff proceeded to commence an action for, among other things, wrongful dismissal and an allegation that Global terminated the plaintiff because the plaintiff expressed concerns as a UDP regarding violations of Ontario’s securities laws. In response, Global (and other co-defendants) counterclaimed against the plaintiff for $53.5 million for slander and other forms of tortious conduct. 

Decision

The court found that Global contravened the Securities Act when it terminated the plaintiff’s employment. The court held that the plaintiff had a reasonable belief that Global’s decision to remove the subordinate from the plaintiff’s supervision interfered with the plaintiff’s responsibilities as a UDP and violated Ontario securities law. The court also held that Global’s decision to terminate the plaintiff’s employment was an act of reprisal contrary to the Securities Act. Critically, the court found Global’s decision to terminate the plaintiff to constitute reprisal because, at least in part, the plaintiff had engaged in activity protected by the Securities Act. 

Although the court declined to award the plaintiff damages for wrongful dismissal or punitive and aggravated damages, the court awarded the plaintiff the remedy set out in section 121.5(6) of the Act which was payment of two times the amount of remuneration the plaintiff would have been paid had the contravention not taken place between the date of the contravention and the date of judgment. The court also held that the Act does not place any obligation to mitigate damages and the court refused to deduct the plaintiff’s post-termination earnings from his statutory award for the unlawful reprisal. In consequence, the plaintiff was awarded $5,379,808.22 plus judgment interest on that amount. The counterclaim was dismissed.

Our thoughts and how we can help 

In addition to regular workplace requirements employers are expected to adhere to under the Employment Standards Act, 2000, securities firms in Ontario must abide by other various strict standards of conduct. Failure to abide by the said standards may result in a violation of the Securities Act and its regulations. The Securities Act brings with it protections from acts of reprisal to employees who engage in activities protected under the Securities Act. The purpose is to ensure integrity and compliance within a financial industry and whistleblowers who raise bona fide concerns and who voice said concerns will be protected by the legislation if the employer somehow disciplines or terminates them as a result of voicing such concerns or acting on such concerns. Even if an employer’s decision to discipline or terminate the employee is only informed in part by an employee’s protected activity, such a decision will be viewed as an act of reprisal which may lead to significant remedies to the employee.

If you are an employee who is considering becoming a whistleblower in any context, it is important to contact an employment lawyer to help you. An employment lawyer can assist you in understanding what your legal rights are, how to approach your employer and what to do if your employer acts against you in retaliation against you for acting as a whistleblower. 

For a general discussion of your employment law rights in cases where an employer commits a reprisal against an employee for asserting or attempting to assert their legal rights under the Employment Standards Act, 2000, please see our guide entitled, “What is a Reprisal” for more information. 

You can contact Zeilikman Law at (905) 417-2227 or here online to get further information about whistleblowers and other employment law topics.