Yohann Johnson, a black man, was a production supervisor with General Motors (GM).  According to the evidence, he had worked for GM, without incident, for almost eight years.   In early 2005, Johnson became responsible for training group leaders in a GM body plant.  An individual who was supposed to be trained by Johnson failed to show up for his training session.  The individual, Alex Markov,  claimed that he was uncomfortable with Johnson because of a remark that Johnson had made to him in the past, regarding Markov’s brother, who had been murdered.  Apparently, Markov’s brother had been killed by a black man.  Johnson understood that Markov was refusing to train with him because Johnson was black.  Markov was permitted by GM, initially, to train with another trainer instead of Johnson.

Johnson filed a complaint with GM alleging that Markov had refused to undergo training with him because he was black.  GM investigated these complaints.  Markov was initially told that he would have to train with Johnson or he would be forced to leave GM.  Apparently, with union involvement, GM agreed that Markov could be relieved of his group leader responsibilities so that he would not have to train with Johnson.  Shortly afterwards, Markov was working in the body shop, performing group leader functions, but GM claimed that this was only a temporary fill-in for another employee.  Markov was suspended for breaching the agreement but he filed a grievance and wound up overturning the suspension.   Johnson viewed this as evidence that GM was not prepared to enforce a deal that was agreed upon, to address Johnson’s concerns of racism.

Johnson ultimately went off on a stress leave that he claimed had come about as a result of workplace racism and the treatment of him.  He sued for constructive dismissal.  He alleged that GM had created a poisoned work atmosphere that tolerated racism at the workplace.

At trial, an Ontario Superior Court Judge, Alfred Stong J., accepted Johnson’s allegations.  The court held GM had “traded away Johnson’s human rights as a bargaining chip” and had created a poisoned workplace for Johnson.  The trial court awarded Johnson damages of more than $150,000 including constructive dismissal damages and other “Wallace” damages for bad faith conduct.  The court held that the evidence had shown that Johnson “satisfied the burden of proof placed on him of proving that he was constructively dismissed from his employment with GM.”

The Ontario Court of Appeal unanimously reversed the decision in its entirety.  It held that the trial judge’s findings should be overturned because they were “wrong, unreasonable or unsupported by the evidence.”  The Court of Appeal held that the foundational finding of racism was “unreasonable and unsupported by the evidence.”  The court noted that there had been no direct evidence of racism by anyone at GM.  The trial court’s conclusion was based on inconsistent statements that Markov had made, leading to a finding that he was lying.  Moreover,  the trial court based its decision on information provided by another employee, effectively “hearsay evidence.”  The Court of Appeal held that, on a proper evidentiary record, it was unreasonable for the trial court to make a funding that Markov’s refusal to train with Johnson was “solely racially based.”  The finding of constructive dismissal was overturned.

The Court of Appeal went on to state that the plaintiff bears the onus of establishing a poisoned workplace in a constructive dismissal case.  It is up to the plaintiff to demonstrate that “the objective reasonable bystander would support the conclusion that a poisoned workplace environment had been created.”  Further, the court stated that “except for particularly egregious, stand-alone incidents, a poisoned workplace is not created, as a matter of law, unless serious wrongful behaviour sufficient to create a hostile or intolerable work environment is persistent or repeated.”

The Court of Appeal rejected the argument that the refusal by one employee on one occasion,  to train with another employee, for racially motivated reasons, would have been enough to establish a poisoned workplace due to racism.  The court held that there was no evidence of systemic or institutional racist behaviour.  It noted that this was one incident over the course of an eight year working relationship and it was addressed, to the satisfaction of Johnson, initially.

Although the trial judge had put together a list of 8 factors that the judge felt established a constructive dismissal, the Court of Appeal rejected each of these factors, as improperly drawn conclusions, factual findings made without a proper evidentiary basis, or for other reasons, finding that the judge’s holdings were a “fundamental misapprehension of the evidence.”

The Court of Appeal was satisfied by GM’s evidence of numerous investigations, the steps it took to deal with the situation and its offers to Johnson to have him working in locations in which he would not have contact with Markov.  The Court of Appeal held that there was no evidence that any conduct on GM’s part signified an intention to “repudiate its contact of employment” with Johnson.  In fact, the Court of Appeal had this to say about the trial decision:

“The trial judge appears to have concluded that GM repudiated Johnson’s employment contract by failing to provide him with a discrimination free employment environment.  With respect, this misconceives GM’s obligations in the circumstances.”  The Court of Appeal, went on to add “GM, however, was not obligated to immunize Johnson from any future contact with Markov or any other body shop employees.”  The Court of Appeal rejected the trial court’s findings that there had been at least one threat made, indirectly, against Johnson.

The Ontario Court of  Appeal decision is an unusual example of a case in which an appellate court will delve into the trial record and overturn various factual findings and conclusions made by the trial court judge.  This is quite rare.  The standard is a very high one for this type of review and appellate courts are not usually interested in “retrying the case.”  Here, however, the Court of Appeal was obviously persuaded that the trial court judge’s conclusions were so unfounded that it felt it was warranted to review all of the findings.

The Court of Appeal’s decision also establishes that claims of a poisoned work atmosphere due to racism will be required to meet a high threshold.  Evidence of one encounter or incident, unless it is particularly “egregious” will not be sufficient to enable an employee to resign and sue for constructive dismissal.

It remains to be seen whether Johnson will file a Request for Leave to Appeal to the Supreme Court of Canada or how this decision will otherwise be applied if Johnson does not.  It is important to note that the case was all based on one incident where one employee had refused to train with another, without any direct evidence that this refusal was racially motivated.  That is to say, this case is certainly not dismissive of poisoned work environment claims based on racism.  However, the Court of Appeal has indicated that it will require a high standard, of explicit, direct incidents of racism in order to uphold a claim of constructive dismissal.

The difficulty with this approach is that many incidents of racism are more subtle and are not nearly as explicit as the standard that the Court of Appeal seems to require.   However, these incidents may still cause significant and far-reaching damage to the victim.  The Court of Appeal recognized that Johnson “believed that he had been a victim of racism in his workplace.”  But it concluded that this was not a “work environment poisoned by racism.”

Katie Hamilton worked as a cashier and cook in Crepe It Up, a small restaurant owned and operated by Chris Quy Lee on Church Street in Toronto. She worked there for about six months. She quit work and filed a complaint against Mr. Lee at the Ontario Human Rights Tribunal, alleging that she had been forced to endure a poisoned work environment.  Ms Hamilton’s claim went to a two day tribunal hearing in May 2012. At the hearing the adjudicator heard evidence of various comments made by Mr. Lee, some of which were only partially contested. The adjudicator made a number of findings of inappropriate comments on the part of Mr. Lee.

The findings included:

• Lee had referred to a Black employee as being on “Jamaican time”
• He had made a comment about anal sex to Ms Hamilton that he knew or ought to have known was unwelcome;
• He had sent an allegedly inappropriate text to Ms Hamilton’s boyfriend when Ms Hamilton had not phoned in to Mr. Lee. This was the day after Halloween and Ms Hamilton had dressed up as Little Red Riding Hood. The adjudicator found that the text said “where is she, did you eat her?” The adjudicator found that this was an unwelcome comment containing sexual innuendo;
• Staff members were asked to wear buttons that said “A kiss gets you 14% off.” The adjudicator held that Mr. Lee knew or should have known that this was would be an invitation to kiss staff.

Ultimately, the adjudicator held that Ms Hamilton had experienced a poisoned work environment, contrary to section 5(1) of the Ontario Human Rights Code. Ms Hamilton was awarded $3,000 as compensation for injury to dignity, feelings and self-respect. Mr. Lee brought a judicial review application to the Ontario Divisional Court.

The Divisional Court overturned the decision and sent it back to the Tribunal to be heard by a different adjudicator. The Divisional Court decision is somewhat puzzling.

Essentially, the Divisional Court rejected two of the factual findings and conclusions of the adjudicator.

With respect to one set of findings, it questioned the process by which the adjudicator had concluded that the comments about anal sex had been made. As a result, it concluded that the adjudicator’s “finding that the allegation was proved is consequently unreasonable.”

The Divisional Court also took issue with the post-Halloween text. It held that Ms Hamilton’s boyfriend would not have shown the allegedly offensive text to her; that it was not “workplace-related” and Ms Hamilton did not complain about it at the time. The Court concluded that “it is difficult to see how this conduct, even if it is discriminatory, could have contributed to the poisoning of the work environment.”

Accordingly, the Divisional Court found that two of the findings by the adjudicator were “unreasonable” and the “finding of liability based on a poisoned work environment must be set aside.”

What has really occurred here? The Divisional Court, without actually hearing the witnesses at a hearing, has substituted its views for those of the adjudicator. Perhaps, the court did not really believe that these comments, even if all true, were serious enough to warrant a finding of a poisoned work atmosphere. That might have been the court’s prerogative, as a matter of law, but that is not what the court chose to say. Instead, the court held that the adjudicator’s findings were “unreasonable.” While the court may not have liked the adjudicator’s decision, it seems like quite a stretch to call the adjudicator’s conclusions “unreasonable.”

Perhaps the court’s view was coloured by the fact that Mr. Lee is an openly gay man. It may be that the judges of the court had concluded that the comments were not as threatening or offensive when made by a gay man to a female employee as they would have been from a straight boss who was seeking sexual favours from a complainant.

In any case, the divisional court applied the 2013 decision of the Ontario Court of Appeal in General Motors of Canada v. Johnson (2013) ONCA 52. Here is the key passage, picked up by the court:

“[E]xcept for particularly egregious, stand-alone incidents, a poisoned workplace is not created, as a matter of law, unless serious wrongful behaviour sufficient to create a hostile or intolerable work environment is persistent or repeated.”

Following the Johnson decision, the Crépe It Up v. Hamilton decision is a further example of a judicial pendulum that has swung back somewhat in favour of employers. Ontario courts have been making it more difficult for employees to establish a “poisoned work atmosphere” in cases of isolated comments or incidents that are viewed by the courts as less serious. This is a marked departure from some early decisions of the Ontario Court of Appeal in a sexual harassment context, such as Bannister v. General Motors [1998] O.J. No. 3402, in which the court took a much stricter view of certain types of unwelcome comments.

In the present case, the matter is not yet concluded. Crépe It Up may still find itself in hot water at the conclusion of another hearing as long as the reasons of a new adjudicator are not held to be half-baked. The adjudicator will need to sift through the new evidence more carefully and apply the divisional court’s definition of a “poisoned work environment” to all of the evidence that it hears.

Of course, Ms Hamilton may prefer to try to take this case to the Ontario Court of Appeal. She would need to “seek leave” but the Court of Appeal may well agree to hear the case. She could certainly argue that there seems to be some very questionable legal analysis by the Divisional Court in this decision.

This could all make for very interesting law. However, another possibility is that Ms Hamilton might simply choose to drop the matter altogether. Given the amount of money at stake ($3,000 plus legal fees awarded to Mr. Lee of approximately $2,000), this might be the most financially sound decision.

We’ll watch for any developments.