Ontario Court of Appeal Significantly Reduces Damages Awarded to Employee

The Ontario Court of Appeal released a decision on May 22, 2014 which significantly reduced the damages awarded to a former employee of Wal-Mart.  The decision, Boucher v. Wal-Mart Canada Corp. and Jason Pinnock specifically reviewed the decision of the Ontario Superior Court of Justice and the award of damages, including aggravated and punitive damages.

The plaintiff, Meredith Boucher, was an employee of Wal-Mart from 1999 until November 2009.  In her latest position she worked as Assistant Manager, where she reported to Store Manager, Jason Pinnock.

In May of 2009, Ms. Boucher refused to falsify a temperature log.  In response, Mr. Pinnock acted in an abusive manner towards Ms. Boucher.  This included using inappropriate language in his discussions with her and taking steps to discipline her.  In response, Ms. Boucher raised concerns directly with Wal-Mart.

Mr. Pinnock learned of this meeting and responded with a sustained campaign of inappropriate behaviour towards Ms. Boucher.  This included demeaning and belittling her, including in front of her colleagues.

Ms. Boucher once again went to Wal-Mart to raise her concerns.  While the company agreed to investigate the issue, they also warned her that she could be the subject of discipline should the company determine that her complaints were unsubstantiated.   Wal-Mart subsequently came to the conclusion that her complaint was baseless and that, in fact, Ms. Boucher had inappropriately taken steps to undermine Mr. Pinnock’s authority.

Mr. Pinnock continued to act in an inappropriate manner towards her, at one point physically grabbing her in front of her colleagues and suggesting that she could not count from one to ten.  Ms. Boucher subsequently left the workplace and demanded that Wal-Mart address her concerns before returning to work.

Ms. Boucher then brought a claim against both Wal-Mart and Mr. Pinnock, claiming that her employment was constructively terminated and that she was entitled to damages relating to the termination of her employment.

The Ontario Superior Court of Justice jury concluded that Ms. Boucher had been constructively dismissed and subsequently awarded her a range of damages.  This included $200,000 in aggravated damages and $1,000,000 in punitive damages against Wal-Mart. The jury also awarded a total of $250,000 against Mr. Pinnock, composed of $100,000 for intentional infliction of mental suffering and $150,000 in punitive damages.

The Ontario Court of Appeal significantly reduced the damages awarded against both Wal-Mart and Mr. Pinnock.  Specifically, the court reduced the $1,000,000 in punitive damages to $100,000.  It also reduced the $150,000 in punitive damages against Mr. Pinnock to $10,000.

The Court reduced these damages in large part on the basis that the award for aggravated damages and intentional infliction of mental suffering provided sufficient compensation for the damages sustained.  Specifically, the Court concluded that the quantum of punitive damages, both against Wal-Mart and Mr. Pinnock reflected “double recovery” that was unreasonable and unjustified.

What does this mean for employers?

This case demonstrates that, while courts are willing to reduce damages which they believe reflect “double recovery”, employers still face significant risk of penalty in cases where they are deemed to have acted inappropriately towards employees.  Employers should accordingly have policies and procedures in place to respond to inappropriate behaviour in the workplace and ensure that these procedures are followed through in practice.  Employers must also take care to ensure that they do not discipline employees for raising a complaint in good faith.  This can help to reduce the risk that employers will find themselves liable for damages relating to termination, including aggravated and/or punitive damages.

For further information on this case, please contact Sharaf Sultan or Lia Chiarotto at 416-214-1313.