Canada: Sticks And Stones May Break My Bones, But Words Can Sometimes Hurt You: Damages For Defamation May Attach To Termination Communications

In Booton v Synergy Plumbing and Heating Ltd., 2019 BCSC 276, an employee successfully sued his former employer for wrongful dismissal as well as defamation in relation to statements made by the employer regarding the reasons for his termination. Booton is a cautionary tale reminding employers to carefully consider how communications about the departure of an employee are worded.

Facts

Mr. Booton was a service manager at Synergy. Synergy had a "Side Jobs and Conflict of Interest" policy prohibiting employees from using company resources to perform side jobs without authorization. The policy stated that such work would be considered a conflict of interest and that non-compliance could result in termination of employment.

It was unclear whether Mr. Booton was aware of the company's policies, as his offer of employment did not reference them and there was no evidence he was ever told about the policies. He used company resources to engage in side jobs on a number of occasions and was paid personally for that work. Synergy was aware of at least one such side job – however, there was no evidence that Mr. Booton was warned about or disciplined for it, or that the policy was then brought to his attention.

Ultimately, due to a client refusing to pay its outstanding account with Synergy on the basis that it had paid Mr. Booton instead, Synergy dismissed Mr. Booton for cause for breach of the policy. After Mr. Booton was terminated, the director of Synergy communicated with various employees regarding the reasons for his departure. Among the statements made were that Mr. Booton had been let go because of a conflict of interest, that he had stolen money from the company, that he had done a side job for a customer and the money had not gone to the company, and that he had committed a breach of trust. Mr. Booton subsequently filed a claim for wrongful dismissal, as well as defamation, against Synergy.

Decision

The Court found that Mr. Booton was not aware of the policy, and that even if he had been, Synergy had not disciplined him or warned him that he was in breach despite knowledge of his actions. Furthermore, there was evidence that Synergy had not applied the policy consistently to other employees either. As a result, the Court found the termination to be wrongful, and awarded 6 months for reasonable notice (from which 1.5 months were deducted to account for lack of mitigation).

Additionally, the director's statements suggesting that Mr. Booton "stole" or had "stolen" money from Synergy were found by the Court to be defamatory.

Words communicated to others and referring to an individual that would tend to lower that individual's reputation in the eyes of a reasonable person will be considered defamatory. One available defence that will allow the speaker to escape liability for defamation is for the speaker to prove that the words were substantially true.

Despite that the director may have felt that what he was saying was true due to the circumstances, the Court observed that his words, viewed objectively, could be interpreted to mean that Mr. Booton stole money, which was defamatory. The director had not proven that this statement was substantially true.

Conversely, the statements that Mr. Booton was dismissed because of a conflict of interest or because money went to him for a side job were determined to be substantially true, and thus those communications were not considered defamatory.

As Mr. Booton had not proven any quantifiable damage from the statements, the Court awarded $500 in general damages for defamation. In assessing the appropriate amount of damages, the Court considered that only a small group of people heard the comments, the comments did not adversely affect Mr. Booton's ability to find subsequent employment, and the statements were not motivated by malice, but rather the director's honest belief.

Takeaways

It is reasonable for employers to want to answer questions that their other employees or customers may have about a departure. Booton is a reminder, however, to be conscientious about communications in that regard, or risk incurring damages for defamatory statements in any subsequent wrongful dismissal suit an employee may file.

Employers would benefit from ensuring that their statements about an employee's departure are limited to statements which are provably true and accurately reflect the circumstances. It would also be wise for employers to limit the audience of such communications only to those who need to know. In Booton, the damages award linked to the defamation claim was relatively small due to the circumstances. However, in a case where the plaintiff successfully quantifies damages, or the comments are widespread or have a demonstrable impact on re-employment, the amount for which an employer may be found to be liable could be much higher.

The author wishes to thank summer articling student Hilary Chu for her help in preparing this article.


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