On July 8, 2013, the Ontario Superior Court released an important decision for multi-national employers in favour of the employer, Four Seasons Hotels Ltd, represented by Christopher Burkett and Cherrine Chow of Baker & McKenzie.

The employee in this case had been employed as a Director of Sales at the Four Seasons in Toronto between 2002 and 2007 before transferring to the sales office for the Nevis resort in New York. The resort itself operates using the Four Seasons Hotel and Resorts trademark. The employee was employed by the Nevis resort under an employment contract, and her employment was based entirely in New York before she was terminated from employment in 2011. The employee claimed that she was wrongfully dismissed from her employment in New York, and alleged violations of the Ontario Human Rights Code for actions of her colleagues in New York.

Our team brought a motion requesting that the action be dismissed or permanently stayed on the basis that the Ontario courts lacked jurisdiction to hear the dispute and that New York was a better forum for the claim.

The court had to determine first, whether it had jurisdiction to hear the dispute and second, even if it did have jurisdiction, whether Ontario was the most appropriate forum.

A court will have jurisdiction to hear a dispute where there is a “real and substantial connection” between the dispute and the court whose jurisdiction is being asserted. Whether such a connection exists requires certain factors to be considered, including whether:

  • the defendant is domiciled or resident in the province;
  • the defendant carries on business in the province;
  • the tort was committed in the province; and
  • a contract connected with the dispute was made in the province.

The court held that it had jurisdiction to hear the dispute as the Human Resources Manager for Four Seasons Hotel Limited, which was based in Toronto, had a real and substantial connection to the plaintiff’s employment at the Nevis resort sales office in New York. The court found that she had effective control over the employees, even though the Human Resources Manager did not participate in the employee’s performance reviews. The court also accepted the evidence that the transfer from the Four Seasons in Toronto to the Nevis resort was facilitated by the Four Seasons in Toronto and rejected the defendants’ argument that the employment contract between the plaintiff and the defendants was a tenuous connection to Ontario.

Having found that the Ontario court had jurisdiction, the court went on to consider whether Ontario was the most appropriate forum to hear the dispute, and concluded it was not. Whether the court is the most appropriate forum is determined by considering whether there is another forum that is better situated to deal fairly and efficiently with the litigation. The decision must be based on fairness and justice to all parties. A court will typically consider the following factors:

  • the location where the contract in dispute was signed;
  • the applicable law of the contract;
  • the location of witnesses, especially key witnesses;
  • the location where the bulk of the evidence will come from;
  • the jurisdiction in which the factual matters arose;
  • the residence or place of business of the parties; and
  • the loss of a legitimate juridical advantage.

The court found that the factual matters at the core of this dispute arose in New York, and therefore key witnesses, namely the plaintiff’s supervisors, as well as the bulk of the evidence, were in New York. New York was therefore the more appropriate forum, despite the fact that both employment contracts were signed in Ontario.

The case creates an important precedent for global multi-national employers who are increasingly mobilizing their workforce. Although employment contracts will generally govern such litigation, global employers should be aware that Ontario courts could still find jurisdiction even if the employment and related events occurred in another province or country if they find there is a real and substantial connection to the employer’s Ontario entity.