The Ontario Court of Appeal recently upheld a substantial jury award given to Meredith Boucher, a former Assistant Manager with Wal-Mart, for being subjected to a pattern of “abusive” harassment by her supervisor.

Ms. Boucher’s deteriorated relationship with her supervisor began when she refused to falsify a log recording temperatures for the store’s coolers. This decision initiated a pattern of harassment which included humiliation, name-calling, and berating in front of managers and customers.

When Ms. Boucher complained of this conduct, she was told that her allegations would be investigated but that if they were found to be unsubstantiated, she would be held accountable for raising them.

Despite this assurance, Ms. Boucher received no follow-up, even when she complained of continued harassment.  Wal-Mart’s management, on the other hand, claimed that it did conduct an investigation; communicated the findings to Ms. Boucher; and held that Ms. Boucher’s allegations were unfounded warranting discipline. The investigation ignored the numerous incidents of public humiliation in front of co-workers.

When the incidents of harassment continued, Ms. Boucher left the store, and stated that she would not return to work until her complaints against her supervisor were adequately addressed, and when Wal-Mart did not take any steps to address her complaints, she brought a lawsuit arguing that she was constructively dismissed.

At trial, the jury awarded Ms. Boucher over $1.4 million in damages for the supervisor’s deliberate harassment and Wal-Mart’s failure to adequately respond to the complaints of harassment.

“Employers who do not follow their own policies do so at their own peril. This failure can and will be used against them in litigious situations.”

The Court of Appeal concluded that an aggravated damage award of $200,000 was justified in light of the following:

  • Wal-Mart took no steps to bring to an end the supervisor’s misconduct;
  • Wal-Mart did not take Ms. Boucher’s complaints seriously, finding them unsubstantiated despite substantial evidence from co-workers that they were well-founded;
  • Wal-Mart seemingly did not meet with witnesses who observed many of the incidents;
  • Wal-Mart failed to enforce its workplace policies, which were aimed at protecting employees from harassment;
  • Wal-Mart threatened Ms. Boucher with retaliation and disciplinary action for making her complaints; and
  • Wal-Mart refused to address Ms. Boucher’s concerns/fears with respect to returning to work and forced her to resign.

The Court of Appeal, however, reduced the punitive award from $1,000,000 to $100,000 as Wal-Mart was already liable for significant compensatory damages, did not profit from its misconduct, or set out to remove Ms. Boucher from the workplace.

What does this mean?

  1. A lackluster investigation can lead to a substantial award of aggravated and punitive damages against an employer, particularly where their failure or insensitivity ends the employment relationship.
  2. As part of a defensible investigation process, employers should acknowledge and investigate the entirety of an employee’s complaint, even where there are reservations about the complaint itself.
  3. Employers who do not follow their own policies do so at their own peril.  This failure can and will be used against them in litigious situations.