The Ontario Court of Appeal has substantially
reduced a record setting $1 million in punitive damages
jury award against a retail employer and $100 000 in
punitive damages against a former manager. These damages
were reduced to $10 000 against the manager and $100 000
against the company.
The employee in this case worked for a major retailer in
various positions since 1999. In 2008 she was hired
as assistant Manager. Her collegial working relationship
with her manager turned sour in less than a year. In May
2009 the manager was found to have asked the employee to
falsify temperature records for the store's food and dairy
refrigerators. When the employee refused, the manager
gave her a disciplinary 'coaching' session. The
employee reported this incident to the District People Manager
of the company. In breach of its policy, the manager was informed
of this meeting and berated the employee for reporting
him. The manager then used profane language and
belittled the employee in front of other employees.
The manager told the employee she was terrible at her job
in front of customers. When the employee raised these issues
with senior management she was told that they would investigate her
concerns, but if they were false she would be held accountable. The
investigation team found Ms. Boucher's claim to be
unsubstantiated. The last straw occurred on November 18, 2009
when the Manager yelled at the employee for failing
to unload some products then grabbed her by the elbow in front of
her co-workers and told her to prove to him that she could count to
This pattern of conduct was found to warrant a punitive damages
award of $1 million against the company and $100,000 against the
manager (in his individual capacity). The decision was appealed to
the Ontario Court of Appeal
The Ontario Court of Appeal lowered the quantum of punitive
damages against both the manager and the company, for two primary
reasons. First, punitive damages are based on deterrence and
denunciation for egregious behaviour rather than compensation to
the plaintiff. In order to ascertain the correct amount of
punitive damages the court must also look at the amount of
compensatory damages. The total of these two figures must, in the
Court's view, be rationally required to punish and deter
the defendant. The awards of the lower court did not meet this
Secondly, punitive damages should not be attributed to an
employer vicariously through a managerial employee's
misconduct. Rather, such damages must be awarded based on the
employer's conduct. The substantial amount of both
compensatory and aggravated damages awarded to the employee
permitted the court to lower the jury-determined amount of punitive
damages for the manager's conduct. The punitive damages against
the company were lowered for the same reason and also because they
could only be attributed specifically to the company's failure
to thoroughly investigate the employee's claims and
discipline the manager.
This case highlights the importance of investigating allegations
of harassment and the risks of a substantial damages award where
this is not done adequately. While damages awards are
significant, the Ontario Court of Appeal has reigned in the
stratospheric damages award of the lower court. While lessened,
such damages are still substantial and their punitive nature means
the award is intended as a warning to deter other employers in
Ontario and across Canada from similar conduct.
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Unfortunately, reasonable accommodation for employees in the workplace continues to be the source of significant litigation and even today we continue to see outrageous examples of employers behaving badly.
We are now beginning to see reported cases involving charges and subsequent fines laid against employers for failing to provide information, instruction and supervision to protect a worker from workplace violence.
On October 13, 2016, the Supreme Court of Canada denied leave to appeal an Ontario Court of Appeal decision which ordered an employer to pay a former employee 37 months of salary and benefits following termination.
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