Hudson’s Bay Sued for Millions in Unpaid Rent Amid COVID-19 Pandemic

Hudson’s Bay Co. (HBC) is the target of an unpaid rent lawsuit launched by two of its landlords who allege the iconic retailer has not paid rent at several locations since April. The unpaid rent lawsuit alleges HBC owes millions in back rent to shopping centre landlords.

Quebec Landlords Launch Unpaid Rent Lawsuit Against HBC

The unpaid rent lawsuit was filed in Quebec by Combinar Real Estate Investment Trust and Oxford Properties Group seeking orders for Hudson’s Bay Co. to pay its bills. 

According to court documents, Hudson’s Bay reportedly owes over $3.5 million in rent and additional fees at five Quebec malls, CBC reported. The back rent owed by Hudson’s Bay continues to increase by over $500,000 monthly. 

Furthermore, it has been reported that Hudson’s Bay may owe more unpaid bills in other provinces.

Oxford Properties accuses Hudson’s Bay of paying rent “under protest” at three of its locations, and withholding rent payments at eight other shopping centres, according to Global News.

Hudson’s Bay stores include locations in Southcentre Mall in Calgary, Alberta, Square One Shopping Centre in Mississauga, Ontario, and Yorkdale Shopping Centre in North York, Ontario. 

Cominar Real Estate is not only after unpaid rent, but also wants to evict Hudson’s Bay from three of its properties in Quebec.

In the unpaid rent lawsuit court documents, Cominar accuses HBC of owing $603,169 in rent at its location in Rockland Shopping Centre, $662,490 at the Champlain Mall store, and another $144,393 at its location in Centre Laval.

Additionally, Oxford Properties alleges Hudson’s Bay of owing $1.4 million in back rent at Les Galeries de la Capitale and $875,680 in unpaid rent at Les Promenades Gatineau.

Hudson’s Bay Claims COVID-19 Challenges

Hudson’s Bay has filed an affidavit in response to the unpaid rent lawsuit. HBC president and chief executive officer, Ian Putnam says the retailer has been working to arrange a reasonable solution with its landlords because the Hudson’s Bay has experienced dramatic setbacks during the pandemic. 

Putnam refutes the unpaid rent lawsuit’s claim that HBC has not cooperated in “good faith negotiations” with the landlords. What’s more, he alleges that the landlords who have launched the unpaid rent lawsuit are not holding up their end of the bargain by supporting HBC with “first class” properties, as the quality of the shopping malls has drastically changed since the beginning of the pandemic in March.

Retailers and shopping malls have suffered a major loss in the foot traffic needed to drive business during the pandemic’s restrictions. Unfortunately, the struggles caused by the pandemic have caused a plethora of legal issues over COVID-19 challenges.

Hudson’s Bay Also Accused of Cutting Severance Pay

In addition to Hudson’s Bay unpaid rent lawsuit, the company is facing other allegations from a Toronto employment lawyer of shorting over 90 employees’ severance benefits. The news of the alleged severance benefit rip-off came just one day after Hudson’s Bay reportedly requested its employees take a 25% pay reduction due to the financial strain of the pandemic.

Lawyer Lior Samfiru of Samfiru Tumarkin LLP explained, “HBC is seeking to avoid paying fair severance packages that are legally owed to these individuals during these difficult times,” reported Global News. 

According to Samfiru, 94 Hudson’s Bay administration and management employees in Toronto were impacted by the severance pay short-change.

The employment lawyer alleges temporary pay cuts began on April 16, and the employees’ positions were abruptly terminated the following day. So, the severance packages given to the newly terminated Hudson’s Bay workers were based on the suddenly decreased rates.

The difference in the decreased severance given to employees could total months’ worth of severance for some employees, Samfiru alleges, according to Global News.

The Hudson’s Bay move violated common law in Canada, according to the lawyer. Samfiru said that a large company cannot “plead ignorance” for the severance cuts and Hudson’s Bay Co. should have known better.

Global News reportedly contacted HBC to give their side of the story, but the company denied any misconduct. 

“We believe the allegations shared with the media are false,” HBC spokesperson Tiffany Bourré, said. “We are committed to treating all associates fairly and with respect,” she added, reported Global News. 

The pandemic’s challenges have forced some businesses to ask their employees to take short-term pay cuts, but it is important that employers are clear on how long the pay cut will last. Employers can take advantage, so employees need to make sure that pay cuts are temporary and let employers know future or long-term pay cuts are not agreed upon.

There have been many legal questions regarding temporary layoffs, employment, business interruption insurance, refunds, privacy rights, and much more during these uncertain times. Top Class Actions is working hard to provide some legal clarity for consumers amid the pandemic. Check out our guide to the Coronavirus outbreak legal issues to see the questions and concerns we’ve been addressing. 

What is your opinion on Hudson’s Bay unpaid rent lawsuit? Do you think the landlords have a legitimate claim or do you think HBC is really struggling to negotiate appropriate terms in light of the pandemic’s challenges? Share your thoughts with us in the comments section below!

Hudson’s Bay employees in the severance cut legal action are being represented by Lior Samfiru of Samfiru Tumarkin LLP.

Read More Lawsuit & Settlement News:

• What You Need to Know About Pandemic Business Interruption Insurance
• Pandemic Business Interruption Insurance Canada Potential Lawsuit
• Long-Term Disability Lawyer | Insurance Claim Denial Help
• Trudeau Promises National Long-Term Care Standards Amid COVID-19