Jeff Polsky has responded on the issue of at will employment and we’ll accept that there is good and bad in both systems. The most important thing for employers from either the US or Canada operating in the other country is to understand the difference and make appropriate adjustments in hiring and firing practices.
Jeff’s post also asked about jury trials in Canada, and specifically whether it was really true that employment claims don’t go to juries and don’t result in punitive damage awards.
Both jury trials and punitive damages are possible in Canada, but they are rare and limited. We recently wrote about a jury case in British Columbia in which more than $800,000 was awarded to the terminated employee, including $573,000 in punitive damages. From the Canadian perspective, it is an extraordinary case, both because it is so unusual to have a jury trial in the first place, and because the damage award was unusually high.
There are two very important constraints on the number and consequences of jury trials in employment matters. First, jury trials are expensive and risky undertakings. In British Columbia, the plaintiff must pay significant fees in advance of having a jury trial. A five day jury trial will require at least $5,000 up front. If the plaintiff is not successful, there is no way to recover those costs and almost always there will be an order to pay costs to the defendant employer. An unsuccessful plaintiff will typically face a bill in the tens of thousands of dollars.
Second, the Supreme Court of Canada has set strict rules on when punitive damage awards are appropriate, and how much they should be. We’re talking about hundreds of thousands of dollars at the high end, not the millions we hear about being awarded by US juries.
In short, employers in Canada need to know that a badly handled termination can lead to significant damages – whether awarded by a jury or a judge – but we are unlikely to see a large number of jury trials in employment cases, and when we do, the damages will be relatively modest.
On behalf of Canadian employers with operations in the US, my question to Jeff is: How do you minimize the risk of a runaway jury?