The Court of Queen’s Bench of Alberta has ruled that CitiFinancial Canada Inc. was not justified in summarily dismissing John Alan Christie, a district manager and longtime employee, over his handling of an incident at a company gathering that involved one of his subordinates ultimately getting drunk and naked.

According to the decision, Citi argued that Christie was terminated for cause “because he failed to prevent and failed to report inappropriate behaviour by a subordinate that occurred in a hotel room at a Citi-sponsored event for managers in January 2012.”

That incident centred around one of the bank’s branch managers, who allegedly got drunk and ultimately got “completely naked, except for a cowboy hat, which was variously on his head, or covering his genitals.” Both the branch manager and Christie were ultimately fired over the incident.

The decision indicates that Citi argued that Christie’s behaviour “justifies dismissal because the employee/employer relationship had broken down. Their position is that the necessary trust relationship no longer existed.” The firm believed that Christie failed to take sufficient action to stop the drunken behaviour “and failed to clear the room of the other employees once he realized the extent of the bad behaviour.”

Citi also argued that Christie compounded his error by failing to report the incident immediately. “They argue that in failing to disclose the incident, Mr. Christie was effectively dishonest,” the decision states, adding that he also didn’t follow up with another employee who later complained about the incident and that he didn’t discipline the individual who caused the incident adequately.

However, Madam Justice D.C. Read sided with Christie, concluding that Citi did not have just cause to dismiss him. Although the judge did find that he made errors in judgment, “these errors did not justify the sanction of dismissal for cause.”

“I conclude that the behaviour of Mr. Christie, while perhaps worthy of some sanction, did not justify the severe sanction of dismissal without notice. It was not, or should not have been seen as, so serious as to fracture the core employment relationship,” Judge Read said in her decision.

In addition, Judge Read concluded that a reasonable notice period for Christie would be 16 months and that he is due compensation for that period, less the amount he has since earned with his new employer in mitigation.