A New Job Doesn’t End an Employee’s Disclosure Obligations

When an employee is dismissed without cause and later finds a new job, the income from that job can reduce the severance package the former employer has to pay.

At common law, an employee’s severance entitlement is based on a period of reasonable notice often called the employee’s notice period. Its purpose is to support the employee during the time it takes to find a new job. The notice period is not intended to act like a bonus if an employee delays starting new employment once a job is available.

In Crawford v. Stingray Group Inc., 2026 ONSC 5772, the Ontario Superior Court considered this issue in a lawsuit over an employee’s dismissal. Lawsuits of this kind are often called wrongful dismissal claims. That label can suggest allegations of dismissal without proper cause or a human rights violation, but it also covers the far more common dispute over whether the employee received enough notice or severance.

The question in Crawford was whether the former employer could demand to see the employee’s job offer and correspondence with the new employer leading up to that offer. The court said yes, reinforcing that an employee who brings a lawsuit must hand over (or “disclose”) relevant documents, including documents that may not help their case.

Mitigation and Wrongful Dismissal

An employee who is dismissed without cause generally has an obligation to take reasonable steps to find comparable replacement employment. This is known as the duty to mitigate. Where an employee finds new employment during the notice period, the income earned will generally be deducted from the severance the former employer owes.

But determining whether an employee has properly mitigated is not always as simple as looking at how much they earned. For example, an employee may receive a job offer but negotiate a later start date. Depending on the circumstances, that delay could reduce the amount of severance the former employer has to pay. That makes the documents surrounding the employee’s job search and eventual hiring potentially important.

What Happened in Crawford?

In Crawford, the employee had sued over their dismissal and a dispute arose over their obligation to produce documents relating to their new employment. The former employer sought documents that included the job offer itself and correspondence with the new employer leading up to it. The employee resisted producing those documents.

The court determined that the documents were generally relevant and had to be produced, subject to limited exceptions. Their relevance was not restricted to the amount of income earned in the new position. Rather, the court found that communications with a prospective employer could also shed light on when the employee was offered the position, when employment could have started, and whether the employee took reasonable steps to mitigate their losses.

Why Does the Start Date Matter?

The core point is simple: from the time the employee starts a new job at equal or greater pay, the former employer no longer owes them severance (or pay in lieu of reasonable notice), because the new employer’s paycheque takes over. That is why the start date matters. But what if the employee could have started earlier and chose not to? Why should the former employer have to pay severance for a period when the employee remained unemployed by choice?

Consider an employee who is dismissed, secures a comparable position, and begins the new job three months after receiving the offer. If the new employer required that start date, the delay may have been unavoidable, and the former employer may still owe severance for those three months. But, if the employee could have started immediately and instead asked for a later start date for personal reasons, the former employer has a strong argument that it should not have to pay for that time. That distinction could determine whether the employee reasonably mitigated their losses.

An employee is not necessarily required to accept every available job or the earliest possible start date. The obligation is to act reasonably in the circumstances. However, an employer defending a claim for severance is entitled to explore whether the employee’s own decisions contributed to their period of unemployment. A choice to delay starting could reduce the employee’s total notice entitlement if a court finds that part of the delay was a failure to mitigate. Correspondence leading up to a job offer may provide evidence that is not apparent from pay statements or other income records.

Disclosure Is Not Optional

The decision also highlights an important aspect of lawsuits over severance. Employees who bring a lawsuit are required to disclose relevant documents, even where those documents may undermine their claim. The process is not limited to documents that support the employee’s position.

At the same time, an employer’s right to disclosure is not unlimited. Documents must be relevant to the matters in dispute, and legitimate privilege or other recognized objections may restrict production. Nevertheless, where mitigation is an issue, correspondence with a prospective or new employer may be relevant to assessing the employee’s efforts to secure replacement employment.

What Does This Mean for Employers and Employees?

Crawford provides a useful reminder that mitigation involves more than simply determining whether an employee found another job. The circumstances surrounding that employment, including when it started, may also affect how much severance is owed.

Employers defending these claims should consider whether the employee’s job search records, offers of employment and related correspondence may be relevant to assessing mitigation. Often lawyers ask for mitigation records but don’t ask for further information about any job offers that are accepted, including any potential delays in the start date.

For employees, the decision is a reminder that the duty to produce relevant documents continues even after replacement employment has been secured. The broader lesson is that mitigation is not simply about the outcome of a job search. The steps taken along the way may also matter.

Read the decision: Crawford v. Stingray Group Inc., 2026 ONSC 5772

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