Bombardier, its President and CEO Éric Martel, Chairman of the Board Pierre Beaudoin and former President and CEO Alain Bellemare are the subject of an application for authorization to institute a class action. The sum claimed could reach 170 million.
According to the request obtained by La Presse, at least 22 employees were deceived by Bombardier and its Restricted Share Unit (RSU) Plan.
The RSUs in question entitle the holder to receive Bombardier Class B shares or a cash payment equivalent to the value of the RSUs, on a predetermined vesting date. This financial incentive was intended to “retain executives and other key employees who particularly contribute to creating economic value”, reports the request led by lawyer Jean-Philippe Caron of the Calex firm.
So far, 22 people involved in this case have been identified. These received a total of 5,000,009 RSUs in November 2020, said the motion filed in Superior Court on Friday. But in total, there are 2,289,785 RSUs outstanding.
However, two months earlier, on September 16, 2020, Bombardier and Alstom had signed an agreement under which Alstom would buy all of the shares of Bombardier Transportation. In January, the transaction was formalized and the employees were transferred to Alstom.
Five days after their transfer, Bombardier employees received an email from the human resources department informing them, according to the request, that their participation in the RSU Plan was terminated, retroactive to the date of the sale of the division. Transportation to Alstom. In addition, they were told, the value of their RSUs would be reduced. For what ? Because they were no longer employed by Bombardier.
“It is clear that Beaudoin, Martel and Bellemare were aware that the members had no expectation of converting the total number of RSUs granted, due to their interpretation of the effect of a sale of assets on the plan and the grant agreement,” writes Calex.
In sum, the 22 current members of the class action have accumulated only 8% of the RSUs granted, which totals “a total shortfall of nearly $13,000,000”, calculate the lawyers in the file. “Everything suggests that the grants [of RSUs to employees] were intended to keep them hooked and to motivate them to give their maximum in the context of the said transaction”, adds one.
According to the motion, Bombardier considers that its employees “would have been terminated without just cause, which would have allegedly led to the termination of the employment relationship and therefore to an early vesting of certain RSUs and an expiration of another tranche of RSUs”.
Mr. Caron argues instead that the employment contracts remained in effect.
The court request recalls that Bombardier sold the C Series project, the CRJ and Q Series aircraft, its Aerostructures and Transportation divisions over the years due to severe financial problems. This would have increased the number of permanent full-time employees from 57,854 to 13,259, between 2018 and 2021. The employees affected by this case could therefore be quite numerous, but their number is unknown at this time.
The group’s representative, Jérôme Gauthier, started working for Bombardier in 1996. He held various positions within the finance department, even after the sale of the Transport division to Alstom. As of November 2020, he had obtained 83,334 RSUs with a vesting date of November 10, 2023.
“Using the value of one Class B share of Bombardier as of the date hereof, which is approximately $70.00, Mr. Gauthier would be entitled to obtain a total sum of $233,335,” the motion states. .
Calex wants the Court to order Bombardier to pay damages and punitive and exemplary damages to the members of the group.
