Progressive Discipline and Just Cause in Rudko v. Insight Canada Inc

Introduction

In Rudko v Insight Canada Inc, 2026 ABKB 178[1], McLennan Ross successfully represented the employer, Insight Canada Inc. (“Insight”), in a wrongful dismissal action that concluded with the Alberta Court of King’s Bench awarding Insight approximately $492,000 in costs against the Plaintiff. 

The significant costs award followed the dismissal of the Plaintiff’s primary claims and the Court’s finding that he relied on fabricated evidence in support of a multi-million-dollar claim.

Background

The Plaintiff began working for Insight and eventually rose to a director-level position. In that role, he was eligible to participate in a restricted stock unit plan (“RSU Plan”), an equity-based compensation program under which employees may receive company shares or their cash value upon vesting. RSU grants were offered to the Plaintiff on two occasions, but he declined both instances.

After ongoing concerns arose regarding the Plaintiff’s performance, Insight directed him to prepare a detailed development action plan to address those concerns. Despite several meetings, written warnings, and clear deadlines, the Plaintiff did not produce the requested performance development plan.

Insight ultimately terminated the Plaintiff’s employment for just cause after approximately 17 years with the company. The Plaintiff later sued Insight for wrongful dismissal, seeking 24 months’ reasonable notice, aggravated and punitive damages, and compensation for more than six years of alleged RSU awards. Through amendments to his pleadings, the claim eventually exceeded $4.4 million.

Trial Decision - Rudko v Insight Canada Inc, 2025 ABKB 513

Wrongful Dismissal Claim

At trial, the Court dismissed the Plaintiff’s wrongful dismissal claim and concluded that Insight had just cause to terminate his employment.

Insight repeatedly raised concerns about the Plaintiff’s performance and clearly communicated expectations for improvement. After a performance review identified several issues, the Plaintiff was directed to prepare a personal development plan. Although he acknowledged the request, he never produced the plan.

Insight later issued a formal written warning outlining several performance deficiencies and setting a deadline for the personal development plan. Instead of providing the plan, the Plaintiff disputed the concerns and indicated that he intended to seek outside advice. A final warning followed with another deadline to comply, which he again refused to meet.

The Court concluded that over an 18-month period Insight had provided the Plaintiff with coaching, repeated warnings, and multiple opportunities to submit the personal development plan. Despite knowing that his employment was in jeopardy, he consistently responded with delay or outright refusal. The Court held that this conduct amounted to clear insubordination, particularly serious given his senior management position. In these circumstances, Insight was justified in terminating the Plaintiff for just cause.

RSU Plan Claim

The Plaintiff also sought damages under the RSU Plan, claiming he was entitled to RSU grants and related compensation during his alleged notice period.

The Court rejected that claim. The evidence showed the Plaintiff had expressly declined participation when grants were offered to him. Because participation in the plan was discretionary, Insight was entitled to stop offering further grants.

The Court also found that several documents relied upon by the Plaintiff in support of his RSU claim had been fabricated. A forensic review of the Plaintiff’s laptop revealed no record of the alleged communications, and the individuals said to have authored the documents denied doing so. The Court also noted that the wording and formatting of the documents were inconsistent with Insight’s usual administrative processes. In any event, the Court held that even if the Plaintiff had otherwise been entitled to RSU grants, the claim would have been barred by the Limitations Act.[2]

As a result, the Plaintiff’s claims were dismissed. His only recovery was a conceded bonus payment for the final quarter of his employment.

The Costs Decision - Rudko v Insight Canada Inc, 2026 ABKB 178

Following the trial decision, the parties were unable to agree on costs and the Court was required to determine the appropriate award.

The Court held that Insight was the substantially successful party in the litigation. Although the Plaintiff obtained judgment for a minor bonus payment, the Court reiterated that costs generally follow the ultimate result and that success is measured by substantial success, not an issue-by-issue analysis.

In determining the appropriate costs award, the Court placed particular weight on the Plaintiff’s litigation misconduct. Rule 10.33(2) of the Alberta Rules of Court (the “ARC”) permits the Court to consider a party’s conduct during litigation, including conduct that delays proceedings or otherwise constitutes misconduct.[3]

The Plaintiff relied on falsified documents in support of his RSU claim in an effort to obtain millions of dollars in damages. The Court found that the fabricated evidence significantly increased the cost and complexity of the litigation, requiring Insight to retain expert evidence that would otherwise not have been necessary.

In the Court’s view, these attempts to mislead the Court through fabricated evidence undermined the administration of justice and warranted significant costs consequences.

In determining the amount of costs, the Court also reviewed the principles governing costs under Rule 10.31 of the ARC, which gives the Court broad discretion to award all or part of the reasonable and proper costs incurred in the litigation. Costs awards are generally intended to provide only partial indemnity to the successful party [4]. The Court noted that full indemnity costs are rare and are typically reserved for exceptional circumstances involving serious misconduct.

The Court concluded that the Plaintiff’s reliance on fabricated evidence constituted egregious litigation misconduct capable of justifying a full indemnity costs award. However, the Court observed that absent the fraudulent RSU evidence, the action still involved an arguable wrongful dismissal claim. For that reason, the Court determined that a blended approach to costs was appropriate.

The Court ultimately awarded Insight:

• $339,127, representing 50% of Insight’s full indemnity costs for the Plaintiff’s egregious intentional litigation misconduct; and
• $152,985, representing 50% of costs calculated under Column 5 of Schedule C of the ARC with a 2× multiplier, with costs doubled for all steps taken after Insight’s formal settlement offer.

The combined award totaled approximately $492,112 in costs, in addition to disbursements and GST.

Takeaways

This decision confirms that courts will impose meaningful financial consequences where parties engage in serious litigation misconduct, particularly where fabricated evidence is introduced.

It also reinforces that entitlement to costs turns on substantial success rather than an issue-by-issue analysis. A party that achieves substantial success may recover significant costs even if the opposing party obtains judgment on a minor claim.