Court says a co-worker's misconduct report carried racial bias and poisoned ct council's decisions
A British Columbia city must pay more than $600,000 to its former chief financial officer after a court ruled that race factored into the decisions to suspend and fire him, even though the council acted on an internal misconduct complaint about his corporate credit card use.
On May 13, 2026, Justice Gomery of the BC Court of Appeal, with Justices Fleming and Brundrett concurring, dismissed the City of Nanaimo's appeal. The decision upholds a Human Rights Tribunal finding that the City discriminated against Victor Mema, a Black man, when it suspended him in March 2018 and terminated him two months later. The reasons highlight that an employer that acts on an internal complaint without full investigation assumes the risk that the complaint may rest on an insecure foundation.
A complaint that catalyzed the suspension and termination
Mema was appointed CFO in July 2016. He held a corporate credit card, known as a P-card, and used it for personal purchases. He consistently identified those purchases but began to delay repayment in 2016. A KPMG forensic audit named him as one of two employees who delayed reimbursing personal expenses and stated that KPMG had seen no evidence of fraud or criminal activity.
In February 2018, a finance department manager prepared a Misconduct Report addressing Mema's P-card use, his vehicle allowance, the CAO's approval of his P-card statements, his approval of the CAO's legal invoices, and a request by his deputy, Mr. Mloyi, that Mema be granted direct access to the City's banking system. Council voted to suspend him on March 1, 2018, and terminated his employment for cause two months later, on May 11.
The Tribunal accepted that "Mr. Mema's behaviour gave rise to reasonable concerns amongst his colleagues in the Finance Department," and was critical of his views on his P-card use as "difficult to understand given his education and experience."
Subconscious bias tainted the decisions
The Tribunal nonetheless found that the Report was shaped by racial stereotyping.
“I am satisfied on a balance of probabilities that – however subconsciously – pernicious stereotypes of a Black man as less honest or trustworthy factored into the Misconduct Report, and as such there is a connection between the Misconduct Report and Mr. Mema’s protected characteristics,” said the tribunal. “The City’s reliance on the discriminatory Misconduct Report tainted its decisions to suspend and then terminate Mr. Mema’s employment, rendering it discriminatory.”
Mema only had to show his protected characteristics were a factor, not the sole or overriding cause. The Tribunal also pointed to surrounding circumstances, including lobbying by the union president, who, according to one councillor's testimony, texted that staff were "not happy with 'those kinds of people' being hired" and called Mema a "criminal." Three councillors testified to discomfort with how Mema was treated, in part because of a sense that his race was involved.
Employers bear the risk of how they handle complaints
The City argued that it could not be held responsible for an employee complainant's subconscious bias. The Court rejected that position, finding the City "is in control over how it handles complaints, and the decisions it makes in reliance on them."
The Court acknowledged the Tribunal made a minor factual error, confusing who requested banking access, but agreed with the chambers judge that "the Tribunal's mistake did not have a material effect on the result."
The reasons state: "It matters not whether Mr. Mema's conduct may have given the City cause to terminate his employment at common law because a termination with cause may nevertheless contravene s. 13(1)(b) of the Code if it is racially motivated."
