written before that heightened fears of US-sized punitive
damage awards in employment law decisions may not, on closer
inspection, be the current trend in Canada. Set against that
backdrop, the employment law community waited with bated breath for
the release of the Ontario Court of Appeal's decision
in Boucher v Wal-Mart
Canada. Released late
last week, the Court reduced the record $1Million punitive award at
trial to $100,000.
The Plaintiff, Ms. Bouchard, was the
assistant manager of a Wal-Mart location. She was a
hard-working and high-performing employee who was well thought of
by her superiors and peers. Following a vacation, she was
asked by her manager to alter a log book that would otherwise
reflect poorly on the store. The employee refused.
Her manager did not take this refusal
well. He began a campaign of harassing treatment against the
employee, including belittling and demeaning her in front of other
employees. This conduct apparently lasted for months.
Ms. Bouchard attempted to engage
Wal-Mart's "open door policy," and brought her
concerns to the attention of higher management. Management
investigated the complaint; however, despite corroborative accounts
from several employees, not only did Wal-Mart conclude that her
allegations were unsubstantiated but it notified her that she would
be "held responsible" for making the complaint.
After another incident of abuse, the
employee resigned her position. She brought an action against
Wal-Mart for constructive dismissal and against her manager for
intentional infliction of mental suffering.
At trial, the jury awarded her 20
weeks' notice in accordance with her written employment
contract. In addition, she was awarded $250,000 against her
manager and $1,200,000 against Wal-Mart. Of those two awards,
$150,000 and $1,000,000 were in punitive damages, respectively.
Although it was a jury that issued
the damages awards at trial, jury verdicts are shown a great deal
of deference on appeal. Appellate courts only alter those
awards which are outside of the range of what a reasonably
instructed jury would award.
In this case, the Court found that
the jury's awards for punitive damages were too high.
Punitive damages are intended to condemn particularly egregious
behaviour. They are appropriate where the other damages
awarded are insufficient for the purposes of retribution,
denunciation and deterrence. The Court found that in light of the
total amounts awarded to the plaintiff, including in non-punitive
damages, those purposes were served with lesser punitive
awards. As such, the Court reduced the punitive damages
awards against her manager and Wal-Mart to $10,000 and $100,000,
This is not to say that the
defendants got off lightly. The Court refused to alter the
awards against the manager for intentionally causing mental
distress or against Wal-Mart for aggravated damages for the manner
in which it treated the employee. Both of those awards were,
according to counsel, the highest of their type in employment law
in Canadian history.
This leaves the total damages, in
addition to the employee's wages for the notice period, at
$110,000 as against the manager and $300,000 as against
What Do Employers Need to Know
Punitive damages awards are rare in
Canadian employment law, and typically issue only in the context of
unique and egregious facts. Nonetheless, there are still
lessons to be learned from the treatment of this case by the
Often, having appropriate policies on
workplace harassment can spare employers from liability for the
actions of employees, or limit exposure, provided the guilty
employee's actions were plainly outside the ordinary course of
employment (i.e. assault). Unfortunately, its failure to live
by the words of its own policy appears to have supported a finding
of liability against Wal-Mart, instead of supporting a defence.
It is essential that workplace
investigations are conducted fairly and impartially, and that only
in the clearest of cases of bad faith complaints should employers
threaten or impose sanctions against complainants.
Imposing sanctions against
complainants when their allegations prove unsubstantiated sends the
message to others not to invoke the employer's internal
conflict resolution system – motivating employees instead to
take their complaints to external regulators and the courts.
Further, imposing sanctions may give rise to liability against the
employer where otherwise only the harasser was guilty of
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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The new Sexual Violence and Harassment Action Plan Act (Bill 132) imposes a range of new duties in regard to workplace harassment. These include requiring employers to amend their programs to implement workplace harassment policies and establish new rules for the investigation of workplace harassment incidents or complaints.
Receive expert guidance from experienced employment lawyers as to how your organization can comply with this new law painlessly and address workplace harassment effectively
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