Executive Summary: Key Legal and Evidentiary Issues

• Central to this case was whether Jeffrey Smith's move from Regional Director back to Division Director amounted to a constructive dismissal.
   
• Also at issue was whether Smith's acceptance of the new role constituted acquiescence that barred his claim.
   
• The court had to determine whether Smith's relationship with Investors Group was that of an employee, dependent contractor, or independent contractor.
   
• Validity of the termination clause in the Regional Director Agreement turned on whether the Employment Standards Act applied to Smith's status as a registered financial advisor.
   
• Witness credibility featured prominently, particularly regarding Smith's evasive testimony about his contracts and his RDAVP eligibility.
   
• Finally, the judgment addressed entitlement to costs following the dismissal of Smith's claims.
   

Facts of the case

Jeffrey Michael Smith worked for Investors Group Financial Services Inc. ("IG") for 14 years, beginning as a consultant in May 2004, advancing to Division Director ("DD") in December 2006, and reaching Regional Director ("RD") in July 2012. On May 8, 2018, as part of a national corporate restructuring, IG terminated Smith's RD position without notice and offered him his former DD role, which he accepted, albeit reluctantly. Roughly four months later, in September 2018, Smith went on medical leave after being diagnosed with work-related depression and anxiety. [Source inconsistency: the judgment gives differing accounts of when this period ended and when RDAVP payments stopped — para. 3 states Smith remained on long-term disability "until February 2020," when he began work with TD Wealth; para. 24 states he received long-term disability benefits "for about one year"; para. 25 places the RDAVP cessation around March 2020; and para. 36(p) places it around February 18, 2020.] Smith's civil claim, filed November 15, 2018, alleged he was an employee or, alternatively, a dependent contractor of IG, and sought damages for wrongful and/or constructive dismissal, along with aggravated and punitive damages.

Policy and legislative provisions at issue

Smith signed three successive non-negotiable agreements with IG: the 2004 Consultant's Agreement, the 2006 DD Agreement (not in evidence), and the 2012 RD Agreement. The Consultant's Agreement described Smith as an agent, not an employee, in a principal-agent relationship, and its termination clause allowed either party to end the agreement at any time, with or without cause or notice. The RD Agreement similarly classified Smith as an independent contractor and contained a comparable termination clause permitting either party to end the relationship without cause or notice. Also relevant was the RD assured-value program ("RDAVP"), which compensates former RDs on a formula basis but excludes those who leave IG for a competitor or are removed for policy violations. On the statutory side, section 31(n) of the Employment Standards Regulation exempts financial advisors registered under section 35 of the Securities Act from the protections of the Employment Standards Act ("ESA").

Reasoning and analysis

Applying the constructive dismissal framework from Farber v. Royal Trust Co. and Potter v. New Brunswick Legal Aid Services Commission, Justice Bennett found that Smith failed to establish a unilateral, substantial change to his contract. The evidence showed Smith retained meaningful earning potential as a DD, including an approximately $20 million client asset base assigned to him as part of a "soft landing," and he introduced no evidence comparing his pre-2012 and post-2018 DD earnings. The court also emphasized that restructuring alone does not constitute constructive dismissal, citing Gillespie v. Ontario Motor League Toronto Club and Meyers v. Chevron Canada Ltd. Even if a breach had occurred, the judge found Smith acquiesced to the change: he signed a new DD agreement, resumed the role for about four months before medical leave, continued to hold himself out as a DD, and received DD compensation and RDAVP payments for roughly 20 months before alleging constructive dismissal. On credibility, the court found Smith evasive, particularly in his repeated refusal to acknowledge understanding contractual terms he had "read and signed." Turning to the termination clause, the court held the ESA did not apply because Smith was registered under section 35 of the Securities Act, and no statutory or common law rule required notice despite the contractual language to the contrary. The court found Smith understood and agreed to the no-notice terms across all three agreements, rendering the termination clause valid, a conclusion the judge noted aligned with the New Brunswick Court of Appeal's decision in Johnson v. Investors Group Financial Services Inc., which upheld a similar clause.

Ruling and overall outcome

Justice Bennett dismissed Smith's claims in their entirety, having found neither constructive dismissal nor a breach of a valid termination clause. As the successful party, Investors Group Financial Services Inc. was found presumptively entitled to costs; however, the judgment does not specify a monetary amount, instead directing the parties to make submissions on costs within 14 days if either side sought a different outcome, with a hearing to follow if necessary.