The Royal Bank of Canada wrongfully dismissed a top-performing financial planner after nearly 12 years of service, the Ontario Superior Court of Justice ruled June 30.
The court awarded former RBC planner Ravini Silva about $2.5 million in damages, plus prejudgment interest and certain pension and benefit amounts.
In Silva v. Royal Bank of Canada, Justice Annette Casullo found RBC “ambushed” Silva by going “nuclear, looking for infractions and manufacturing violations where none existed.”
Silva worked at RBC from 2006 until her dismissal in April 2018. She managed a $150-million book of business and ranked No. 1 among financial planners in the Greater Toronto Area and No. 3 nationally in 2015 and 2016.
But her relationship with management deteriorated after she transferred from a branch in Ajax, Ont., to one in Richmond Hill, Ont., in 2016.
RBC planned to gradually move Silva’s Ajax clients to other planners while she built a new client base in Richmond Hill, replacing old clients with new on a one-for-one basis. The arrangement was never formalized in writing, and Silva resisted giving up some high-net-worth Ajax clients because she believed the replacement clients were less valuable.
“What ensued was a growing frustration on management’s part over Ms. Silva’s reticence,” the decision said. “RBC believed Ms. Silva was being defiant, disrespectful and insubordinate.”
Silva eventually agreed to a 12- to 18-month transition. But after a client complained, management took control of the process and abruptly reassigned about 65 of her clients without advance notice to Silva.
Silva was notified while away on an award cruise and unable to access email.
Her clients pushed back. One left RBC entirely and about 50 were ultimately returned to Silva.
“RBC’s transition implementation backfired,” Casullo wrote. “Ms. Silva’s clients were fiercely loyal to her, and refused to work with a new planner.”
Tensions continued to rise. Silva received her first “does not meet” performance rating in 10 years in the fourth quarter of 2016, followed by three more in 2017. The ratings reduced her variable compensation, and Silva complained that management was retaliating against her.
“Deeply flawed” investigation
RBC fired Silva for cause in April 2018, relying on allegations that she forwarded confidential client information to her personal email, processed trades before obtaining evidence of client authorization and asked clients to backdate replacement trade documents.
The court found Silva’s conduct did not amount to dishonesty or a persistent pattern of misconduct serious enough to justify dismissal for cause.
The judge criticized the investigations leading to Silva’s termination.
The corporate investigation service (CIS) team’s inquiry “fell woefully short of being thorough, fair and contextual,” Casullo wrote. “Instead it lacked impartiality and was deeply flawed. In place of a balanced exercise, CIS’s investigation was more a form of ammunition gathering.”
The court also criticized the compliance investigation of RBC subsidiary Royal Mutual Funds Inc. (RMFI). It assigned Silva’s file to Susan Dicks, who was four days into her job, had not completed mandatory training and was unfamiliar with RBC’s processes and policies.
Dicks filed an initial Member Event Tracking System report with the Mutual Fund Dealers Association of Canada (MFDA) without first seeking clarification from Silva, contacting affected clients, looking for branch paperwork or reviewing sales platform notes.
“RBC relied on these inadequate investigations to wrongly assert cause,” Casullo wrote. “Further, it made inaccurate, incomplete and misleading regulatory reports knowing that these actions would cause permanent damage to Ms. Silva.”
The MFDA later characterized Silva’s breaches as “minor in nature” and took no action beyond issuing a cautionary letter.
“The misconduct that led RBC to terminate Ms. Silva was of such minor concern to the national regulator … that no sanction was deemed necessary,” Casullo wrote.
The court also criticized Doug Berry, an RBC employee relations advisor who was advising Silva’s managers while handling her complaint that those managers were retaliating against her.
Silva didn’t know Berry had advised the managers who were the subject of her complaint. Casullo described Berry as “steering both sides of the conflict forward” and found “zero evidence” that he took meaningful steps to assess Silva’s retaliation concerns.
Silva retained an employment lawyer in 2017, who provided RBC with a detailed complaint alleging workplace harassment, unfair treatment and retaliation. RBC rejected the allegations as unsupported and closed the matter in February 2018, about two months before firing Silva.
Dismissal for cause damaged career
The consequences of the dismissal continued after Silva left RBC.
RMFI filed a notice of termination through the Canadian Securities Administrators’ national registration database indicating Silva had been dismissed for cause and investigated for possible material violations of fiduciary duties, regulatory requirements or compliance procedures.
The notice said Silva had forwarded confidential client and RBC information to her personal email and processed authorized transactions before obtaining client signatures.
The court found the notice effectively prevented Silva from returning to the financial planning industry.
Silva was hired as a financial planner by TD in August 2018, but was terminated two months later after the bank conducted its due diligence and learned she had been dismissed for cause.
An IG Wealth recruiter testified he wanted to hire Silva but was directed to end discussions after management learned about her dismissal. A Freedom 55 Financial recruiter similarly testified the firm would not offer her a position because she had been terminated for cause.
Even if Silva’s record were eventually cleared, an IG recruiter testified, “her ability to bring a book of business with her has dissipated.”
The court awarded Silva $1.92 million for lost earning capacity and $313,333 representing 16 months’ reasonable notice.
It also awarded $150,000 in aggravated damages for the mental distress caused by RBC’s conduct and $250,000 in punitive damages, according to the judgment’s final disposition.
The court also ordered RMFI to correct Silva’s notice of termination to reflect that RBC did not have cause to dismiss her.
Casullo described RBC’s conduct as “harsh and reprehensible,” finding management wanted Silva out, the investigation suffered from confirmation bias and one manager’s motives became “vindictive” after learning about Silva’s retaliation complaint.
“RBC holds itself to the highest standards of integrity, which are essential to protecting our clients and their financial information. Our employees are central to delivering on this commitment to earn the trust of our clients. All reports of misconduct are taken seriously and investigated promptly and thoroughly, as appropriate,” Nathaniel Wallace, senior manager of personal banking and commercial banking, said in an email. “We are committed to following a fair process for all involved. We are carefully reviewing the court’s decision as we consider the appropriate next steps.”
Silva’s legal representative didn’t respond to a request for comment by press time.