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Date:
2012.10.18

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THE EMPLOYERS' EDGE

UPDATE: Walmart Appeals (Ontario Jury Awards Constructively Dismissed Employee $1.15 Million in Punitive Damages)

In a recent post ,we reported on the largest punitive damages award ever handed down by a jury in Canadian employment law history in Higginson v. Babine Forest Products Ltd. (“Higginson”). In that case the jury awarded a wrongfully dismissed employee $573,000 in punitive damages in addition to pay in lieu of notice. That record was recently broken by a jury in Windsor, Ontario, who awarded a former Walmart employee a total of $1,150,000 in punitive damages.

Meredith Boucher was an assistant manager with Walmart when she left her employment. She was 42 years old and had 10 years of service with her employer. Ms. Boucher sued Walmart and her manager for constructive dismissal, intentional infliction of mental suffering, sexual harassment, discrimination and assault by another assistant manager. Ms. Boucher alleged that following a refusal to falsify records at the request of her manager, she was subjected to verbal abuse by that manager on an almost daily basis for over six months, including being belittled in front of co-workers and being punched in the arm on two consecutive days by another assistant manager. Ms. Boucher alleged that when she reported her treatment to senior management, no action was taken, and she was advised that she will be held accountable for her accusations. Ms. Boucher alleged that she suffered negative health consequences because of her treatment at work and stopped going to work because her work environment had become intolerable. Boucher asked the jury to award $200,000 for intentional infliction of mental suffering and $1,000,000 in punitive damages.

After deliberating for only 2.5 hours, the jury found that Ms. Boucher had been constructively dismissed and subjected to intentional infliction of mental suffering, but did not find that she was sexually harassed or discriminated against. The jury found Walmart liable and awarded Ms. Boucher $200,000 for intentional infliction of mental suffering, $10,000.00 for assault from the other assistant manager and $1,000,000 in punitive damages.  In addition, the jury awarded an additional $100,000 for intentional infliction of mental suffering and $150,000 in punitive damages against the offending manager, bringing the total award to $1.46 million.

In light of Bill 168, which was introduced in 2010 to protect employees from violence and harassment at work, and the recent public outrage with respect to bullying in general, it is perhaps not surprising that a jury would make an award for what it must have felt was workplace bullying by a superior. However, appellate courts in Canada have historically frowned upon large punitive damages awards and we would expect to see the punitive damages claims significantly reduced or overturned completely on appeal.

As an example, in Keays v. Honda Canada Inc. the trial judge awarded Keays, a dismissed employee, $500,000 in punitive damages for discriminatory and high handed treatment by the employer. The Ontario Court of Appeal reduced the punitive damages to $100,000, finding that the trial judge’s award failed to “accord with the fundamental principle of proportionality”. On a further appeal, the Supreme Court of Canada found that punitive damages were not appropriate and overturned the punitive damages award altogether. Similarly, significant damages for intentional infliction of mental suffering awarded at trial in a workplace bullying case were reduced or reversed by the Ontario Court of Appeal in Piresferreira v. Ayotte.

The punitive damages award discussed above in Higginson was also appealed, but the parties reached a settlement prior to a decision being issued on appeal.

There is little doubt that Walmart will and should appeal the jury’s award.  However, even if the jury’s award is reduced on appeal, there is no doubt that this decision will have a “chilling effect” on employers who should expect to see more punitive damage and intentional infliction of mental suffering claims in future wrongful dismissal pleadings as we did after the Keays decision came out.

In November, Walmart filed an appeal with the Ontario Court of Appeal, asking that Ms. Boucher's claim be dismissed, or alternatively asking that the jury's award be lowered.  Crawford Chondon & Partners LLP will continue to monitor this case and report on the Court of Appeal's decision once it is released.

Please Note: This blog has been prepared as an informational service for our clients and other interested parties. It is not intended to constitute legal advice, a complete statement of the law or opinion on any subject. Although we endeavour to ensure the accuracy of the content, no one should act upon the information provided without a thorough examination of the law after the facts of a specific situation are fully considered.

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