If an employee is “induced” to leave their current employment, the recruiting employer may face additional liability if the new employee is later dismissed.
The risks associated with inducement were recently highlighted in a decision of the Ontario Superior Court of Justice – Miller v Alaya Care Inc.[1] In Miller, an employee who had been induced to leave secure employment was dismissed after only seven months and awarded fourteen months of common law reasonable notice (more than $200,000). How did this happen and how might this be avoided?
The legal concept of “inducement”
Inducement occurs when an employer actively persuades a candidate to leave secure, ongoing employment to join their organization, often with promises of higher pay, long-term stability, or advancement.
If a candidate has been induced to join a new employer, and their employment is terminated, courts will consider this an aggravating factor to increase the period of common law reasonable notice to which the employee is entitled. Whether inducement has occurred, and the degree of inducement, are highly fact dependent. A court will consider:
- The degree to which the employer initiated the hiring process.
- The reasonable expectations of both parties.
- How willing the employee was to leave their former employer.
- Whether there were assurances of long-term employment.
- Whether the employee undertook due diligence before accepting the position.
- Whether the employer’s conduct went beyond usual persuasion or “courtship” between an employer and prospective employee.
- The length of employment with the former employer.
- The length of time the employee remained in the new position.
What happened in Miller?
Miller was employed by WellSky Inc. as a VP of Marketing, for approximately twelve years. She was 61 years old and the most senior employee in WellSky’s Canadian operations.
WellSky was the largest competitor of the defendant, Alaya Care. Over the course of several months Alaya Care courted Miller in the hopes of convincing her to leave WellSky and join Alaya Care. Initially, Miller was not interested so, to sweeten the pot, Alaya Care:
- Offered increased salary, bonuses and equity set to vest over three years (to replace the roughly $400,000 USD of stock options Miller might lose by leaving WellSky).
- Suggested Alaya Care was looking to grow under the leadership of Miller.
- Offered to pay for a lawyer to defend Miller in any action WellSky might bring against her.
- Several times wrote to Miller to “convince” and “lure” her and inquire “what it would take” to persuade her to join Alaya Care.
Eventually, Miller accepted Alaya Care’s offer of employment as Vice President, Client Services, and resigned from her position with WellSky. She signed an employment agreement with a termination clause that stated, “In the unlikely event that you are terminated without cause, you will receive a minimum of 4 months of base salary”.
Seven months later, Alaya Care terminated Miller’s employment without cause, and Miller brought an action for wrongful dismissal.
Inducement
Although employed with Alaya Care for just seven months, Miller submitted she was entitled to 22 months of common law reasonable notice on the basis of inducement. She argued that because she was induced to leave WellSky, she should be treated as if she had been an employee with 12.5 years’ service.
The court largely accepted Miller’s position and awarded her 14 months’ notice. The court found Miller had been induced because the discussions with Alaya Care went “beyond the normal courtship between an employer and prospective employee.” Specifically:
- Alaya Care reached out to Miller first.
- Alaya Care represented to Miller that her experience would assist in “growing” the company.
- Alaya Care inquired into Miller’s renumeration with WellSky, including bonuses and stock options, so as to “lure” her.
- Alaya Care had hired a number of people in 2021 as part of an “aggressive growth strategy.”
- Alaya Care went so far as to indemnify Miller in the event WellSky commenced litigation against her for leaving it to join Alaya Care.
Best practices for employers
Recruiting high-level performers to leave their employment often requires active persuasion. At the same time, employers engaged in recruitment should be aware of the risks associated with inducement. Although every case has its own facts and context, a prospective new employer should:
- Be mindful of language used (written and verbal) when communicating with a candidate.
- Avoid expressing or implying any guarantee regarding future length of employment or job security.
- Include in the employment agreement a provision that the employee confirms and agrees they were not induced to leave their prior employment.
- Include in the employment agreement an enforceable termination clause that defines the employee’s entitlements in the event of termination of employment.
To learn more and for assistance contact your Sherrard Kuzz LLP lawyer or your Sherrard Kuzz LLP lawyer or info@sherrardkuzz.com.
Jackson Lund is a lawyer with Sherrard Kuzz LLP, one of Canada’s leading employment and labour law firms, representing employers. Jackson can be reached at 416.603.0700 (Main), 416.420.0738 (24 Hour) or by visiting www.sherrardkuzz.com.
The information contained in this article is provided for general information purposes only and does not constitute legal or other professional advice, nor does accessing this information create a lawyer-client relationship. This article is current as of June 2025 and applies only to Ontario, Canada, or such other laws of Canada as expressly indicated. Information about the law is checked for legal accuracy as at the date the presentation/article is prepared but may become outdated as laws or policies change. For clarification or for legal or other professional assistance please contact Sherrard Kuzz LLP.
[1] Miller v Alaya Care Inc 2025 ONSC 1028 [Miller].
