Since 2010, the Global Law Experts annual awards have been celebrating excellence, innovation and performance across the legal communities from around the world.
posted 3 years ago
The Ontario Municipal Employees Retirement System is pushing back against a lawsuit from a former top investing professional, saying he was not wrongfully dismissed and that his claim for $65-million in back pay is wildly inflated.
Tim Patterson’s statement of claim, filed in July in a Toronto court, alleges OMERS fired him and one other professional in the pension fund’s private-equity division for refusing to accept changes to their pay plans. Mr. Patterson participated in an incentive plan for OMERS Private Equity Inc. (OMERS PE) professionals that allowed them a cut of profits from their deals, a commonplace arrangement in private-equity firms – but not common among Canada’s public-sector pensions.
Mr. Patterson, who joined OMERS in 2010, says in his statement of claim that OMERS repeatedly scaled back the terms of the incentive plan, making it less lucrative for him and others. The changes, according to Mr. Patterson, included introducing a lifetime cap on employee earnings, lowering an annual earnings cap and cutting the share of profits on deals.
In its statement of defence filed with the court Wednesday, OMERS says it “always had the discretion to amend, adjust, or replace” the plan, and that this was expressly stated in plan documents that Mr. Patterson acknowledged annually with his signature. “At no point” did OMERS “make any prior commitments, guarantees or representations that the [plan] would be indefinitely annually renewed on substantially the same or similar terms,” the statement says.
OMERS also denies some of Mr. Patterson’s allegations about the terms of the compensation plan, including his assertion that the plan initially calculated returns on investments cumulatively, over many years, rather than expecting the investments to exceed a particular return on an annual basis. The cumulative-return calculation underlies Mr. Patterson’s estimate of what he is owed.
In its response, OMERS does not specifically counter Mr. Patterson’s $65-million claim with a lower estimate of what he is owed.
OMERS decided to replace the plan in 2021 with a new compensation scheme that aligned with employee objectives and provided “appropriate incentive compensation,” according to the pension’s statement of defence.
When Mr. Patterson “signalled his rejection” of the new plan, “OMERS recognized that Mr. Patterson’s employment could not practicably continue” and began severance talks, which led to an agreed termination date of Feb. 1. OMERS says it has already paid Mr. Patterson more than $2-million in severance, and it has asked for most of it back as part of its counterclaim.
In its statement of defence, OMERS denies that Mr. Patterson was constructively dismissed (in other words, that the terms of his employment were so severely altered that he was effectively fired) or that he was wrongfully terminated.
“This claim at its very core is grossly exaggerated and entirely without merit,” OMERS spokesperson Shelagh Paul said in a statement e-mailed to The Globe and Mail. She called it “flatly inconsistent with the annual reporting to Mr. Patterson of his entitlements and how they are calculated.”
“As stewards of the plan and on behalf of our members, we will vigorously defend our position,” Ms. Paul said. “Mr. Patterson was a member of our OMERS family for years and we are surprised and disappointed in both his claim and his approach.”
Howard Levitt, Mr. Patterson’s lawyer, said Thursday in a written statement that OMERS’s defence “belies the very principle of constructive dismissal. Basically they are saying that they dramatically reduced Mr. Patterson’s remuneration [retroactively and prospectively] and, because he did not accept that, and they would not continue with the existing incentive plan, it is somehow acceptable to fire him because the alternative would be to pay him too little.”
A private-equity-style compensation plan “lasts for the time period that those investments are held by the fund, and payouts are made to both the Investors [OMERS] and the Plan members when assets are sold,” Mr. Levitt said. “Therefore, to retroactively delete the plan is outrageous.”
OMERS also pushed back on Mr. Patterson’s assertions in his claim that “he was far and away [OMERS PE’s] highest performer, meaningfully outperforming his managing director peers” and was personally responsible for generating 60 per cent of the realized profits at OMERS Private Equity over the past eight years.
“Contrary to Mr. Patterson’s pleading, the investment work of OMERS PE is very much a team effort and one that relies upon the efforts of many OMERS PE employees, rather than the contributions of any one individual,” OMERS writes in its statement of defence. “OMERS PE’s successes and results are not attributable to any one individual and are certainly not singly attributable to Mr. Patterson as his pleading suggests.”
THIS ARTICLE ORIGINALLY APPEARED HERE: https://www.theglobeandmail.com/business/article-omers-pushes-back-on-employee-lawsuit-over-compensation/?utm_campaign=showcase&utm_source=google&utm_medium=single_story_-_business&utm_content=single_story
posted 2 days ago
posted 2 days ago
posted 3 days ago
posted 4 days ago
posted 4 days ago
posted 4 days ago
posted 4 days ago
No results available
ResetFind the right Legal Expert for your business
Sign up for the latest legal briefings and news within Global Law Experts’ community, as well as a whole host of features, editorial and conference updates direct to your email inbox.
Naturally you can unsubscribe at any time.
Global Law Experts is dedicated to providing exceptional legal services to clients around the world. With a vast network of highly skilled and experienced lawyers, we are committed to delivering innovative and tailored solutions to meet the diverse needs of our clients in various jurisdictions.