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What the Netflix Retreat Lawsuit Teaches HR About Off Duty Conduct and Fair Workplace Investigations

Rustic cabin chair circle by the lake

A company retreat meant to build trust has instead produced a wrongful dismissal lawsuit. For HR professionals, the case is a useful prompt to revisit two issues that come up in almost every workplace investigation: how far off duty conduct can justify discipline, and how to keep the process fair to everyone involved, not just the person who raised the complaint.

The Incident That Sparked the Lawsuit

Kevin Baillie, formerly a vice president and head of creative at Eyeline Studios, Netflix’s visual effects division, is suing the company over his termination earlier this year. At a January retreat at a Netflix owned property in California, employees were reportedly encouraged to take part in a “vulnerability trust exercise.” During that exercise, Baillie shared that he had undergone physician supervised ketamine therapy in 2022 to treat depression following his mother’s death.

Netflix later investigated the disclosure, along with alleged profanity and alcohol use at the same retreat, and terminated him weeks afterward. According to the lawsuit, a company lawyer acknowledged that the ketamine therapy disclosure factored into the decision.

Commentators have focused on the culture problem: an employer that invites candour, then disciplines someone for exactly what was disclosed. But underneath that story are two legal questions HR teams face constantly, whether or not a lawsuit ever follows.

Off Duty Conduct Test for BC Public Sector Employers and Their Unionized Workers

BC arbitral law largely tracks the Ontario jurisprudence on this issue, and BC arbitrators have consistently framed the threshold question around three points before an employer can even get to the question of discipline. In Re Emergency Health Services Commission and CUPE, Local 873, the arbitrator drew on Re U.A.W., Local 195 and Huron Steel Products Co. Ltd. and Re Millhaven Fibres Ltd., Millhaven Works, and Oil, Chemical & Atomic Workers International Union, Local 9-670 to ask:

  • Was the employee’s conduct sufficiently injurious to the interests of the employer?
  • Did the employee act in a manner incompatible with the due and faithful discharge of their duty?
  • Did the employee do anything prejudicial, or likely to be prejudicial, to the reputation of the employer?

If the answer to one or more of these questions is yes, the employer is properly concerned with the employee’s conduct, regardless of whether it happened on or off company property, or during or outside working hours. Whether that concern justifies actual discipline, and how severe that discipline can be, then depends on the gravity of the conduct.

Once that threshold is met, BC arbitrators turn to the more detailed Millhaven Fibres framework sourced from Ontario to decide whether discharge specifically is justified. The employer carries the onus of showing that:

  • the conduct of the employee harms the employer’s reputation or product
  • the employee’s behaviour renders them unable to perform their duties satisfactorily
  • the employee’s behaviour leads to refusal, reluctance, or inability of other employees to work with them
  • the employee has been guilty of a serious breach of the Criminal Code, injuring the general reputation of the employer and its employees
  • the conduct makes it difficult for the employer to properly carry out its function of efficiently managing its operations and directing its workforce

This test is still applied today. In A.B. v. Treasury Board (Department of National Defence), 2024 FPSLREB 153, the Federal Public Sector Labour Relations and Employment Board reinstated an employee terminated over old criminal convictions, finding the employer had not shown the convictions actually harmed its reputation or operations once the Millhaven factors were properly weighed.

This matters for the Netflix situation. Ketamine therapy for depression is medical treatment for what would generally be considered a disability under human rights legislation. Disciplining someone substantially because of that disclosure, rather than because of a demonstrated performance problem or genuine reputational harm, sits close to the line between legitimate management action and discrimination based on a protected ground.

Why the Bar Is Higher in the Public Sector

The BC and Canadian case law consistently hold public sector employees to a stricter standard on account of the public dimension to their employment. Employees in government, education, health care, and policing hold positions of public trust, so their off duty conduct is scrutinized for whether it undermines public confidence, not just whether it affects day to day operations.

BC’s own Standards of Conduct for public service employees require that conduct instill confidence and trust and not bring the public service into disrepute, treating this as a condition of employment rather than an optional norm. Arbitrators have upheld discipline for BC public sector employees over conduct that might not justify discipline in a private workplace. In School District No. 44 (North Vancouver) v. North Vancouver Teachers’ Association (Gosal Grievance), 2018 CanLII 58473 (BC LA), an arbitrator upheld discipline against a teacher for profane comments posted about students and the school environment, finding the postings undermined professional responsibilities and the integrity of the school setting.

For a private employer such as Netflix, harm to reputation or operations generally has to be shown, not just an uneasy feeling about optics. A public body facing similar facts might reasonably ask more searching questions, but only after clearing the same threshold test. Either way, the process used to reach a conclusion matters just as much as the substantive test.

Procedural Fairness: Protecting the Respondent’s Interests Too

This is where investigations most often run into trouble, in any sector. A workplace investigation exists to find facts and address a genuine concern, but too often it is built, whether by design or by default, around the complainant’s account, with the respondent brought in only to react to conclusions that are already largely formed.

Canadian courts treat this imbalance as a legal problem, not simply a fairness concern. In Marentette v. Canada (Attorney General), 2024 FC 676 (CanLII), the Federal Court set aside a completed harassment investigation because the respondent had not been given a fair chance to know and respond to the case against him, including the positions taken by the complainant and witnesses, and the investigator’s preliminary findings, before the report was finalized. The Court confirmed that workplace harassment investigations attract a high degree of procedural fairness, so a brief closing interview after the conclusions are drafted is not enough.

At minimum, a procedurally fair investigation gives a respondent the chance to:

  • learn clearly and promptly what they are alleged to have done
  • see the substance of the evidence and allegations against them, not just a summary
  • respond in a genuine, properly timed interview, not a token formality
  • have that response actually considered with an open mind
  • be assessed by an investigator who is free of actual or apparent bias

None of this competes with a complainant’s right to be heard, to confidentiality, and to protection from reprisal. Fair process is not a zero sum exercise. A well run investigation can take a complaint seriously while still giving the respondent a genuine opportunity to contextualize disputed facts, challenge characterizations, and raise mitigating circumstances before any decision is made.

A Weak Investigation Can Get Very Expensive

A recent Ontario decision shows just how costly a one sided investigation can become. In Wilsher v. Olympic Wholesale, 2026 ONSC 3620, a night shift supervisor with seventeen years of service was fired for alleged time theft after he had been adjusting employee time records to reflect a longstanding, informal practice used across the whole night shift. The employer treated this as fraud and dismissed him for cause.

The court disagreed. The practice was not unique to this employee, he had not personally benefited from it, and nothing in the evidence showed he understood it to be wrongdoing. On top of that, the investigation itself was the bigger problem. The employer questioned only this employee, never checked whether other supervisors were doing the same thing, and ran the interview more like an interrogation than a fact finding conversation. Because the termination letter had accused him of fraud, his Record of Employment affected his eligibility for benefits, and he was left without a reference after seventeen years, the court found the manner of dismissal itself was carried out in bad faith.

The result was not a modest penalty. The employee was awarded nineteen months of reasonable notice for the wrongful dismissal itself, then an additional fourteen months on top of that because of how the investigation and termination were handled, for a total of thirty three months. For employers, the lesson is direct: an investigation designed to justify a decision that has already been made, rather than to genuinely find out what happened, does not just weaken a cause defence. It can independently increase the damages owed.

Why a Lawyer Investigator Gives Employers More Options Later

There is a third risk that shows up after an investigation is finished and everyone has moved on: a freedom of information request. Complainants and respondents alike can, and often do, ask for the investigation file months or years later. Who conducted the investigation can determine whether the employer has any real choice about what gets disclosed.

British Columbia’s Office of the Information and Privacy Commissioner has confirmed this distinction directly. In Provincial Health Services Authority (Re), 2026 BCIPC 79 (CanLII), the adjudicator upheld the health authority’s decision to withhold all 334 pages of a harassment investigation file, including the investigator’s emails, drafts, and even the law firm’s invoices, after a former employee requested the file on his own complaint. The investigation had been carried out by an external lawyer retained to both investigate the complaint and provide legal advice on it. The adjudicator found that legal advice includes the work of ascertaining and investigating the underlying facts, so the entire file fell within solicitor client privilege. Notably, even the itemized legal invoices stayed protected, since disclosing them could allow an accurate inference about the substance of the advice given. Similar reasoning and conclusion can be found in an earlier case involving the City of Burnaby. In Order F26-31, issued April 24, 2026 (2026 BCIPC 39), the same tribunal upheld the City’s right to decline disclosure of an investigation conducted under solicitor client privilege, reinforcing that this protection is not unique to health authorities and applies just as readily to municipal employers.

The distinction that drives both outcomes is simple but easy to miss when structuring an investigation. An investigation run by an in-house HR team, or by a non-lawyer external investigator, produces a report that is generally accessible under freedom of information law once someone requests it, subject to ordinary exemptions like personal privacy. An investigation run by a lawyer, retained specifically to investigate and advise, can be shielded by solicitor client privilege in its entirety, provided the retainer and the lawyer’s role are set up correctly from the outset.

This does not mean every investigation needs a lawyer, or that privilege should be used to avoid legitimate accountability. But when an employer wants the option, later, to control whether and how much of an investigation becomes public or is disclosed to a requesting party, that option only exists if a lawyer conducted the investigation from the start. A non-lawyer investigator, however experienced, cannot create that shield after the fact.

The Lesson for HR Professionals

Baillie’s lawsuit braids these issues together. If the ketamine therapy disclosure was a substantial basis for his termination, Netflix would need to clear the BC threshold test, and then the Millhaven factors, showing a real connection to legitimate business harm rather than simple discomfort with an unexpected topic. And regardless of the outcome, the process raises its own question: an employee invited into a structured vulnerability exercise, then investigated partly based on what that exercise produced, deserved a genuine chance to respond and explain before the outcome was effectively decided.

For HR teams, and especially those in the public sector where the off duty conduct bar is already lower once the threshold is met, these practices reduce risk:

  • Before disciplining for conduct outside normal duties, work through the threshold questions first, then the Millhaven factors, rather than jumping straight to a discipline decision.
  • Treat medical and disability related disclosures with particular care. On their own, they rarely support discipline.
  • Investigate the full picture, not just the one employee in front of you. If a practice is widespread, singling out one person invites exactly the kind of finding the court reached in Wilsher.
  • Give the respondent the same quality of notice, disclosure, and genuine opportunity to be heard that the complainant receives, and document each stage as you go.
  • Decide early who should conduct the investigation. If there is any chance you will want the option to protect the file from later disclosure, that decision has to be made before the investigation starts, not after a request arrives.

Getting the substance right and getting the process right both matter. Missing either one is how a trust building retreat, or a routine time card review, becomes an expensive lawsuit.

Why This Is the Moment to Retain a Lawyer Investigator, Not Just an Investigator

Every issue raised in this article, the off duty conduct test, the duty to give a respondent a genuine opportunity to be heard, and the cost of a one sided process, points to the same underlying decision: who should be entrusted to run the investigation in the first place.

A non-lawyer investigator, even a highly skilled one, can only ever deliver a report. A lawyer investigator delivers that same rigorous, fact-finding process, but retains the ability to have the entire file protected by solicitor client privilege if the employer later needs that option, as confirmed in both the Provincial Health Services Authority decision and the City of Burnaby order above. That is not a marginal advantage. It is the difference between an employer having a choice about disclosure and an employer having no choice at all.

Neil Hain brings both the dispute resolution expertise to run a fair, defensible investigation and the legal standing to preserve your organization’s options afterward. If your organization is facing a complaint, a difficult disciplinary decision involving conduct outside the workplace, or you want to structure your next investigation so that privilege is protected from day one, contact Neil Hain before the investigation begins. That timing is what makes the protection available at all.

This article is intended for general information purposes for HR professionals and does not constitute legal advice. Please consult a lawyer for guidance on a specific situation.