Punitive and aggravated damages in employment cases are alive and well in Canada, thanks to a recent decision of the Ontario Court of Appeal.  The ground-breaking decision in Boucher v. Wal-Mart (2014) ONCA 419 upheld significant findings of a trial decision even while reducing some of the amounts awarded.  The end result was that an Ontario employee was left with a court award of more than $400,000 after proving the tort of intentional infliction of mental suffering.  It is a tremendously useful decision for employees, particularly those who are subjected to workplace abuse.  For employers, the decision demands increased vigilance in dealing with complaints of inappropriate workplace treatment made by employees.

The plaintiff, Meredith Boucher, worked for Wal-Mart for a total of 9 years.  She had a strong employment history and had been promoted on a number of occasions.  By the time the relevant events occurred, Ms Boucher was working as an assistant manager at a Wal-Mart location in Windsor.

According to the trial court decision and the decision of the Ontario Court of Appeal, Ms Boucher refused to go along with her manager’s request to falsify a temperature log in the store that tracked produce and dairy product temperatures.  After this refusal on her part, her manager, Jason Pinnock, became irate and vindictive.  Mr. Pinnock proceeded to launch a “torrent of abuse” against her which included belittling, humiliating and demeaning conduct.

Ms Boucher complained to the district manager.  Rather than deal with the complaints properly, the district manager shared the complaints with the manager, who became even more vindictive.  Ms Boucher complained again.  She was told that her complaints were “unsubstantiated,” (despite overwhelming evidence) and she was threatened with consequences for continuing to undermine her “manager’s authority.”

At trial, a jury awarded $1M in punitive damages to the plaintiff, payable by Walmart.  It also awarded a host of other damages including damages for intentional infliction of mental suffering and punitive damages against the manager, Mr. Pinnock, personally. It awarded aggravated damages against Wal-Mart.  In total, the trial award came to more than $1.4M.

In a 2-1 majority decision, the Court of Appeal upheld some of these awards, while reducing the punitive damages awards.

The Court had little difficulty upholding the finding that the actions of the manager and of Wal-Mart were “reprehensible.”  In the case of Wal-Mart, the Court upheld findings that Wal-Mart had refused to take the complaints seriously, dismissed them as unsubstantiated, threatened to dismiss the plaintiff for making the complaints, refused to discipline the manager and, overall, acted in a “reprehensible” manner.

However, the Court was still left with the question of what this is all worth under Canadian law.  While it upheld an award of $100,000 for damages for “intentional infliction of mental distress” against the manager personally, the Court reduced the award of punitive damages against him from $100,000 to $10,000, seemingly out of concern for the appearance of a double recovery.  This total of $110,000 against a manager for intentional infliction of mental distress is still one of the higher awards of its type in Canadian employment law.

The Court also upheld an award of $200,000 for aggravated damages against Wal-Mart, finding that some of Wal-Mart’s actions, including its threat of a reprisal, were particularly vindictive.

However, the Court refused to uphold a jury award of $1M in punitive damages against Wal-Mart, finding that this would be too high.  Instead, it reduced the award to $100,000, which is still a very significant amount in all the circumstances.

Conclusion

The bottom line here is that an employee facing abusive treatment wound up with an Ontario Court of Appeal award of more than $410,000 plus legal fees – in addition to damages for severance.

This case is of tremendous significance.  Some of the previous Canadian cases have involved facts that are far more extreme.  For example, in one case, Pate Estate, the plaintiff had been the subject of a wholly unsubstantiated criminal trial.

In this Wal-Mart case, the facts, unfortunately, are far more common, at least in my experience.  It is not always easy for employees to prove that they were subjected to abuse.  But many Canadian employees are faced with somewhat similar treatment.

Here, fortunately for Ms Boucher, the co-employees apparently testified and provided evidence that bolstered her claims.

It is also fair to say that Canadian employers, more often than not, when faced with these types of claims, will attempt to deal with them properly and fairly.  It is rare that an employer will take no action whatsoever and instead threaten the employee who has made the complaint.  However, this certainly does occur more often than one might think.

I regularly represent clients who face abusive scenarios at work, even if many of those scenarios are not quite as extreme as what occurred in the Wal-Mart case.  Employees will now have a much wider range of options available, including the possibility of obtaining much greater damages awards.

For employers, this decision will really serve as a serious warning that complaints of workplace harassment must be investigated and handled appropriately.  The consequences of not responding properly can be dramatic and very costly.

While Wal-Mart may well ask the Supreme Court of Canada to hear this case, it is far from certain that the Supreme Court would see any reason to intervene.  If the Supreme Court does choose to hear the case, it may well consider a cross-appeal to reinstate the $1M in punitive damages that had been awarded at trial, given all of the harsh factual findings in this case.  It seems unlikely to me that the Court would interfere with the aggravated damages awards that were upheld by the Ontario Court of Appeal.