Executive Summary: Key Legal and Evidentiary Issues

• Plaintiff sought damages for wrongful dismissal following termination from CEO position.

• Defendant failed to respond to the lawsuit and was noted in default, triggering a motion for default judgment.

• Court examined whether deemed admissions and affidavit evidence supported a finding of liability.

• Employment agreement entitled plaintiff to nine months’ pay in lieu of notice, which was unpaid.

• Emotional distress claim was rejected due to lack of evidence and insufficient employer misconduct.

• Court awarded contract damages, partial indemnity costs, and pre-judgment interest to the plaintiff.

Employment background and termination

Robert Barlow was hired as Chief Executive Officer (CEO) of 6HARMONICS INC. on September 14, 2021, under a written employment agreement. The contract specified that in the absence of cause, the employer could terminate his employment by providing a set severance: initially six months, with incremental increases based on tenure, up to a maximum of twelve months. By the time of his dismissal, Mr. Barlow was entitled to nine months’ pay in lieu of notice. The agreement also clarified that the plaintiff had no duty to mitigate losses.

On May 17, 2024, the company notified Mr. Barlow that his employment would end on May 31, 2024, and promised to pay out the severance in accordance with the contract. While Mr. Barlow received his final two weeks of salary for work performed, the employer failed to pay any of the nine months’ severance that followed.

Proceedings and motion for default judgment

Mr. Barlow filed a lawsuit for wrongful dismissal and breach of contract. 6HARMONICS INC. did not defend the action and was noted in default. The plaintiff brought a motion for default judgment. Despite the defendant's lack of response, the court emphasized that default alone does not guarantee judgment; the plaintiff still had to prove entitlement to damages with admissible evidence.

The court reviewed the pleadings and affidavit evidence, confirming that the employment agreement had been breached. It found that the contract explicitly set out severance terms and that no justification had been offered for non-payment. The court also noted that the plaintiff had resumed employment at a lower salary as of January 2025 but was not obligated to mitigate under the agreement.

Claim for mental distress and additional damages

Mr. Barlow also claimed emotional distress and financial hardship due to the employer’s conduct. He relied on cases such as Wallace v. United Grain Growers and Honda Canada Inc. v. Keays. However, the court found those authorities distinguishable. In contrast to the facts in those cases, the defendant here had not alleged cause, engaged in reputational harm, or acted in bad faith beyond non-payment. Furthermore, Mr. Barlow provided no detailed evidence of distress or hardship, making the claim unsupportable.

Costs and interest

The plaintiff requested costs on a substantial indemnity basis, citing a contingency fee arrangement and the defendant’s failure to participate in proceedings. The court declined to award elevated costs, finding no reprehensible or outrageous conduct by the defendant. Instead, partial indemnity costs were awarded based on a reasonable hourly rate and hours billed. Pre-judgment interest was granted at a rate of 5.3%.

Outcome and final judgment

The court awarded Mr. Barlow $184,166.69 in damages for breach of the employment agreement, representing eight and a half months of unpaid salary. He was also awarded partial indemnity costs of $4,920 plus applicable taxes and disbursements. No additional damages for mental anguish were granted. The decision reinforces the enforceability of fixed severance provisions and the evidentiary standards required for enhanced damages in wrongful dismissal claims.