May 22, 2014
The Ontario Court of Appeal recently reduced the largest damages award in Canadian history for workplace bullying, which had included an award of $1M in punitive damages.
The plaintiff, an assistant store manager at Wal-Mart, made allegations of personal harassment and abuse against the store manager to whom she reported. The company conducted an internal investigation into the allegations, but found the allegations to be unsubstantiated. The plaintiff subsequently took medical leave and advised Wal-Mart she would not return until her compliant was further addressed. When her complaint was not resolved to her satisfaction, she brought legal action claiming constructive dismissal. Following a trial, a jury awarded her a total of $1.45M in damages, including $1M in punitive damages against the company.
Following a recent appeal, the punitive damages were reduced to $100,000. The Court of Appeal concluded the punitive damages award was not required in order to punish Wal-Mart or deter future conduct, as other heads of damages satisfied those objectives. The Court also found the conduct of Wal-Mart to be considerably less serious, both in gravity and effect, than misconduct seen in prior cases in which large punitive damages have been awarded. The Court noted Wal-Mart did not force the plaintiff’s resignation, did not profit from its alleged wrong, and the conduct alleged lasted less than six months. For similar reasons, punitive damages ordered personally against the store manager were reduced from $150,000 to $10,000 dollars.
Despite the significant reduction in damages, this case provides an important reminder to employers of the potential liability that can arise from workplace harassment claims. Having workplace policies in place and ensuring any complaints are handled in a legally compliant manner are essential measures to minimize the potential exposure to such claims.
See the full text of the decision by clicking here
If you have any questions about investigating and responding to allegations of workplace harassment, or any other questions relating to workplace law, please do not hesitate to contact a Mathews Dinsdale lawyer.
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