On October 10, 2012, an Ontario Superior Court (“ONSC”) jury awarded employee Meredith Boucher a staggering total of $1,450,000 in aggravated damages, punitive damages, and damages for intentional infliction of mental suffering upon finding that she had been repeatedly bullied and harassed by her manager (Jason Pinnock) at Wal-Mart Canada Corp. (“Wal-Mart”).

The unprecedented damages award caught the attention of employment lawyers and employers across Canada. Not surprisingly, Pinnock and Wal-Mart appealed the jury’s award to the ONCA, the decision of which was released May 22, 2014.  While upholding the jury’s findings on liability, the ONCA reduced the punitive damages award by $1,040,000, bringing the total combined damages award down to $410,000.

FACTS OF THE CASE

After refusing to falsify a store temperature log at the request of Pinnock, Boucher was subjected to both a formal disciplinary session and ongoing profane and disrespectful language by Pinnock. On June 3, 2009, pursuant to Wal-Mart’s Open Door Communication Policy (the “Policy”), Boucher attempted to convey her concerns about Pinnock to Wal-Mart management. Her concerns were not addressed.

In breach of the Policy, Pinnock was made aware of Boucher’s complaint to management. Pinnock then proceeded to unleash a torrent of abuse on Boucher. Between June to November 2009, Pinnock belittled, demeaned, berated, criticized, taunted and humiliated Boucher continuously, often in front of co-workers and customers. For example, he told Boucher that she was stupid, told her that she was blowing her career away, and repeatedly used profanity and abusive language in front of customers. Employees testified that Pinnock was ferocious towards Boucher, and that his actions were humiliating, terrible and horrific.

Boucher met with Wal-Mart senior management again on October 26, 2009 regarding Pinnock’s behaviour. She also continued to report specific examples of his abuse. On November 14, 2009, Wal-Mart informed Boucher that it had conducted an investigation and concluded that (i) Boucher’s complaints were unsubstantiated, and (ii) Boucher was trying to undermine Pinnock’s authority. Boucher left the meeting in tears. Pinnock was never disciplined or cautioned.

As a result of Pinnock’s mistreatment and Wal-Mart’s failure or refusal to address it, Boucher suffered from loss of appetite, insomnia, and weight loss. She was described by colleagues as looking ill, grey and haggard. Pinnock not only recognized the physical and emotional effects of his mistreatment on Boucher, but also verbalized his intent to not stop until she resigned.

There was a culminating incident on November 18, 2009. On this occasion, Pinnock grabbed Boucher by the elbow, in front of a group of employees, and challenged her to prove that she knew how to count to ten. Boucher was so humiliated she left the store. After this incident Boucher sent an email to Wal-Mart saying she would not return to work until her complaints regarding Pinnock were dealt with. The complaints were not dealt with and Boucher never returned to work.

DAMAGES SUMMARY

The ONSC jury found that Boucher had been constructively dismissed, and awarded her a severance package totalling 20 weeks’ pay, in accordance with an employment contract she had entered into with Wal- Mart. Wal-Mart had in fact continued Boucher’s salary for eight (8) months after she stopped working, so no additional amounts were owed in this regard.

The ONSC awarded additional damages consisting of aggravated and punitive damages and damages for intentional infliction of mental suffering in the total amount of $1,450,000.00.

ONSC JURY DECISION

Damages for intentional infliction of mental suffering are “compensatory”, meaning that they are designed to compensate the plaintiff for harm actually suffered as a result of the defendant’s misconduct. In this case, the jury awarded such damages against Pinnock because it determined that his actions were flagrant and outrageous, were calculated to cause harm to Boucher, and caused Boucher to suffer a visible and provable illness. The magnitude of this award ($100,000) reveals how deeply offensive the jury found Pinnock’s treatment of Boucher to be.

Aggravated damages are also compensatory, and are awarded against employers in termination cases where the circumstances of dismissal are considered insensitive, demeaning, unfair or in bad faith. In this case, the jury awarded $200,000 in aggravated damages against Wal-Mart – a strong reaction to its failure to enforce its own policies, and threats of retaliation against Boucher.

Unlike aggravated damages, punitive damages have no relation to the plaintiff’s actual suffering or losses. Instead, punitive damages are designed to punish a defendant in exceptional cases where conduct has been malicious or oppressive (and, in the case of an employer, amounts to an “independent actionable wrong”, separate and apart from the wrongful or constructive dismissal).  In this case, the jury made punitive damages awards against both Wal-Mart and Pinnock, totalling $1,150,000. The jury found that both defendants’ conduct was reprehensible and that the amounts awarded were required to punish the defendants, and deter and denounce any such future behavior.

ONTARIO COURT OF APPEAL DECISION

The ONCA noted that the amount of compensatory damages awarded by the jury was very high and unprecedented in Canadian employment law. However, the ONCA found that the amounts were not so plainly unreasonable that they ought to be reduced, stating that “the jury represents the conscience of the community” and “there is no precedent until it is done for the first time”.

The ONCA did, however, take issue with the jury’s punitive damages awards. The ONCA reduced the punitive awards by roughly 90%, to $110,000. The ONCA concluded that punitive damages amount awarded by the jury, when coupled with the compensatory damage award, produced a sum that was inordinately large and higher than what was rationally needed to punish both defendants. Below is a summary of the damages awarded at trial and reduced by the ONCA:

Click here to view the table

LESSONS FOR EMPLOYERS

In this case, the actions of both defendants, Pinnock and Wal-Mart, demonstrated a culture of indifference to workplace policies. Employers should not only have policies dealing with violence, harassment, and other forms of mistreatment in the workplace, but should actively enforce such policies. Employers should not threaten to impose, or impose, discipline if and when workplace complaints turn out to be unfounded, as this will discourage employees from bringing forth good faith concerns. Discipline should only occur if, after a fair investigation, it is determined that an employee filed a meritless complaint for improper, vexatious, and/or bad faith purposes.

This case also serves as a warning to managers/ supervisors and employers that they may both be held accountable for behaviour towards employees that is abusive, unfair or insensitive.

Sarah Boyle