I was fired for seeking another job. How can I get compensation?

The question

Recently, I applied for a position with a large Alberta company. Following a series of interviews, I was asked to provide a reference from my current employer. Although I was reluctant to cite such a reference (it would certainly place me in an awkward situation with my current employer), I elected to do so with a condition that the hiring manager could only contact the reference if I was offered the job – subject to a favourable reference from my current employer that satisfied the hiring manager.

The hiring manager agreed to that condition. Two days later, my current manager advised me that he had been contacted by the hiring manager and was extremely displeased that I was seeking a new job. He also advised me that I was being dismissed; he did not want me to embark on new projects for the company's clients, given I was seeking a new job and I would soon leave the company. I certainly understood his position. And, of course, I did not receive an offer of employment letter from the hiring company.

When I contacted the hiring company's HR department, they advised me that they were entitled to use any reference I provided them and the condition I specified was irrelevant from a legal perspective.

Are employers legally entitled to use a reference and ignore the conditions I specified for contacting the reference – and to which the hiring manager agreed to?

Can I take legal action (i.e. sue for damages) against the hiring company and the hiring manager? Clearly, had he not contacted the reference, my current manager would not have learned about my job search and I would not have been terminated.

The answer

Your situation may just fit into a category of cases that I like to refer to as the workplace law "twilight zone." This is because you clearly have been wronged, but it is not entirely clear how you should proceed.

First, let me deal with your ex-employer. Upon learning that you were seeking other work, it decided to fire you. No big surprise there. However, you should have been provided with severance pay. The law of dismissal requires employers to provide terminated employees with severance pay unless they were fired for serious misconduct, such as theft or dishonesty. The mere fact that you were looking for another job does not, by itself, constitute a serious form of misconduct. Therefore, while your ex-employer had the right to fire you, it could not do so without providing you with some severance pay, the amount of which is a function of how long it ought to reasonably take you to find a comparable job.

Now, to the hiring company. Your claim against it will depend, to a large degree, on the exact agreement made between you and the hiring manager, if there ever was one. This is because there are agreements in life and then there are agreements in law, and for most people, agreements in law are always harder to prove.

If the hiring manager guaranteed you that he would not call your employer unless you were offered a job, this was still subject to his receipt of a satisfactory reference – meaning that he may have respected your "condition" but determined that, based on the reference, he would not then offer you the job. Otherwise, he could just as easily argue that there was never an agreement in place or that your understanding of that agreement was vastly different from his. This is one reason why agreements such as these should always be put in writing. Do not leave them to memory or a handshake because documents do not lie – people do.

However, let's assume that you and the hiring manager did have a binding agreement and the reference he received was positive. In that case, what the human resources department has told you is wrong. You could sue the hiring company for a breach of contract claim, based on the amount of time it would reasonably take you to find another job. Alternatively, you could sue it for making a misrepresentation, which is a careless or deliberately wrong statement – in this case accepting your "condition," which induced you to enter into an agreement, causing you damages. As in the case of being fired without severance, the damages you would receive here would be intended to compensate you for your economic losses, such as lost pay, while you search for another job.

As you can see, the route you should take really depends on whether your ex-employer has paid you appropriate severance. If it has, you may have already received what you are legally entitled to.

Daniel A. Lublin is a workplace law expert and a partner at Whitten & Lublin. He writes on legal issues for Globe Careers.

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