Harassment Too Costly to Ignore

By Graeme McFarlane

Does your business have a spare $400,000 lying around? Do you know how your supervisors are treating their subordinates? It may be a good idea to find out and deal with any problems – right away.

Boucher v. Wal-Mart Canada Sets Precedent
The Ontario Court of Appeal has just issued a decision in which the employer was ordered to pay $410,000 to an employee who had been harassed at work and whose complaints had been ignored. In the decision of Boucher v. Wal-Mart Canada Corp., 2014 ONCA 419 included elements for damages in lieu of notice, aggravated damages, punitive damages, and damages against the harasser.

The employee had been working for approximately nine years when she became involved in a dispute with her immediate supervisor when she refused to falsify a work log. When she refused to do so, her supervisor subjected her to a disciplinary “coaching” session.
As a result, the employee engaged the company’s communication policy regarding the discipline together with his use of profane and disrespectful language. Notwithstanding that such information was to be confidential, the supervisor learned of the complaint and became increasingly hostile. He would often abuse her in front of other employees calling her “stupid” and telling her to “let [him] know when [she] can’t fucking handle it anymore.” There were many other examples of very serious abuse at the hands of this individual. One manager counseled the supervisor to ease back on his criticism of the employee to which the supervisor replied “not until she f*$@ing quits.”

Due Diligence = Proper Investigations
The employee then raised the matter further in accordance with the employer’s other harassment type policies. She made two formal complaints. The employer gave evidence that it had investigated the employee’s allegations, but found them to be unjustified and that she would face some sort of action for bringing the complaints. The employer concluded that the employee was trying to undermine the supervisor’s authority. It appears that the investigators either did not investigate the matter properly or they ignored the numerous incidents where the supervisor acted inappropriately towards the employee.

Eventually, the employee quit and sued the employer for constructive dismissal, aggravated damages with respect to how the dismissal occurred and for punitive damages. At trial, a jury awarded her $1,450,000 against the employer and against her harasser. Both appealed the award.

During the appeal, both the employer and the harasser argued that the aggravated damages claim should be set aside because the trial judge made a mistake when giving the jury instructions on the elements needed for such a claim to succeed. They also argued that the punitive damages claim should also be set aside because even if the conduct was true, it was not so serious to cause a court to issue judicial punishment.

Courts Uphold Aggravated Damages
The appeal court upheld the aggravated damages awards against both the employer and the harasser. It said that the harasser’s “conduct was flagrant and outrageous. He belittled, humiliated and demeaned [the employee] continuously and unrelentingly, often in front of co-workers, for nearly six months.” While the award for intentional infliction of mental suffering was high, it was not unreasonable in the circumstances given the seriousness of the harm.

With respect to the employer the appeal court said that it “took no steps to bring an end to [the harasser’s] misconduct. It did not take the

complaints seriously, finding them unsubstantiated despite substantial evidence from co-workers that they were well-founded. It failed to enforce its workplace policies, which on their face were designed to protect employees from the kind of treatment [the harasser] subjected [the employee] to. And it threatened [the employee] with retaliation for making her complaints, an especially vindictive act.” Accordingly, the aggravated damage award of $200,000 against the employer and $100,000 against the harasser were  also appropriate.

Managing Managers a Must
The court did, however, substantially reduce the punitive damages award. For the employer it reduced the amount from $1,000,000 to $100,000 and for the harasser from $150,000 to $10,000. It’s rationale was essentially that each defendant already was liable for substantial compensatory awards and that those would carry strong punitive elements. Further, that such large punitive awards were not rationally connected to the wrongs committed in this case.

This decision shows the importance of why an employer should be carefully monitoring the goings on in the workplace. Courts are becoming increasingly willing to punish employers for the wrongdoings of its managers. Investigations must be done properly and company policies followed without prejudging the outcome. This case will be especially interesting in British Columbia because the courts have yet to decisively say whether such an outcome remains possible given the implementation of WorkSafe’s harassment regulations (the subject of an early article by this author). Stay tuned.

Graeme McFarlane is a partner at Roper Greyell LLP which is a firm focused on partnering with companies to find solutions to workplace legal issues.

(PeopleTalk Summer 2014)

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