The largest damage award in Canadian history for workplace bullying has been significantly reduced on appeal.  But the standard of care imposed on employers to protect employees from harassment and abuse has not been lowered.  The lessons from Boucher v. Wal-Mart Canada Corp., 2014 ONCA 419 are critical for responsible organizations.

Wal-Mart Canada Corp. (“Wal-Mart”) convinced the Ontario Court of Appeal that a million dollar punitive damage award assessed by a Windsor jury in an employment matter was not “rationally necessary” to deter the alleged misconduct. The punitive damages were reduced by 90% to $100,000.

The case is extremely instructive. Despite Wal-Mart’s significant victory on appeal, the case demonstrates how large sophisticated organizations with good policies can still be held liable for the misconduct of an employee.

Wal-Mart apparently had all the necessary policies, three of which were singled out by the Court of Appeal:

  1. The Open Door Communication Policy, which encourages employees to report concerns on a confidential basis about how stores are operated or how employees are treated;
  2. The Prevention of Violence in the Workplace Violence, in which the company undertook to take all complaints seriously and to protect complainants from reprisal; and, finally,
  3. The Harassment and Discrimination Policy, which required employees to treat each other with respect and dignity.

Boucher testified, and the jury clearly believed, that despite the policies, she was subject to unrelenting harassment and reprisal that led her to quit her job. What went wrong?

Background

By all accounts, Meredith Boucher (“Boucher”), the plaintiff, was a good employee. She started with Wal-Mart in 1999 and received a series of promotions throughout her career. In November, 2008, she was promoted to assistant store manager of the Windsor location. She reported to Jason Pinnock (“Pinnock”), the co-defendant in the case. 

Boucher clearly had an excellent relationship with Pinnock at the beginning as her initial review, given in April, 2009, confirmed in writing that she was “a great asset to any team.” Things turned sour very quickly.

In May, 2009, Boucher went on a course at Wal-Mart’s Food Academy. Upon her return, it was discovered that certain temperature logs that Boucher was required to keep had not been properly completed during her absence. Pinnock asked her to fill in the forms as if the log had been properly kept during her absence. Boucher refused to do so, because she felt it would be falsifying documents. Pinnock was apparently concerned that having incomplete records would negatively impact the Windsor’s location overall evaluation and his own evaluation as store manager. After Boucher’s refusal, Pinnock subjected her to a disciplinary “coaching” session.

Boucher utilized Wal-Mart’s Open Door Communication Policy to communicate her concern about being requested to alter the log, the disciplinary coaching session and Pinnock’s use of profane language with Boucher and other female employees.  Boucher met with a District People Manager on June 3, 2009 to express her concern.

Unfortunately, Pinnock found out about Boucher’s complaint and things went from bad to worse. Co-workers testified that Pinnock’s treatment of Boucher was “terrible” and “horrific.” Boucher complained about “unrelenting and increasing torrent of abuse.” Boucher asked for another meeting, this time with senior management, because nothing had been done to address her initial complaints.

In mid-November, 2009, Wal-Mart’s management team advised Boucher that the investigation had determined that her complaints were “unsubstantiated” and that she was clearly trying to “undermine Pinnock’s authority.” They warned she would be disciplined for making unsubstantiated complaints. Pinnock continued his campaign of harassment.

There was evidence that even when the Store People Manager warned Pinnock about how he was treating Boucher, Pinnock responded that he wouldn’t stop, “not until she f**g quits.”

Boucher became quite ill and went on medical leave in late November, 2009 and advised that she would not return until her concerns were resolved. She never returned to Wal-Mart and sued instead.

Interestingly, Wal-Mart continued Boucher’s salary and benefits for 8 months, significantly beyond the 20 weeks to which Boucher was contractually entitled.

Effectively, then, the entire law suit was about damages beyond the breach of contract or constructive dismissal.

The Jury Award

Lawyers are often told not to go to court in the hopes of getting large damages from juries, because juries are unpredictable. This Windsor jury gave one of the highest damage award in an employment matter in Canada.

The Windsor jury made the following award:

  1. against Pinnock personally,  $100,000 for Pinnock’s intentional inflection of mental suffering and another $150,000 for punitive damages, for a total of $250,000.
  2. against Wal-Mart separately, $200,000 for aggravated damages and $1,000,000 in punitive damages, for a total of $1,200,000.

Costs of $140,000 were also assessed against the defendants. The total award was therefore  in the range of $1,450,000.

The Court of Appeal decision

On appeal, the Court of Appeal reduced the punitive damages considerably because the majority found that the quantum of damages assessed by the jury was not rationally required to punish either Pinnock or Wal-Mart, given the magnitude of the other awards. The Court of Appeal reduced the punitive damages against Pinnock to $10,000 and against by Wal-Mart to $100,000. This reduces the damage award to Ms. Boucher by over a million dollars.

What went wrong?

Despite Wal-Mart’s and Pinnock’s great success in reducing damages, the case was a defeat for the defendants.

The Court of Appeal found, “Wal-Mart’s management team ignored the numerous incidents in which Pinnock berated Boucher in front of co-workers. And little evidence was led at trial that Wal-Mart’s investigators sought information from the other assistant managers who had witnessed Pinnock’s abusive conduct.” (emphasis added)

How could the Court of Appeal and the jury come to such a different decision than Wal-Mart’s own management team, who had investigated and dismissed the same complaints as being motivated by a desire to undermine Pinnock?

While the judgement does not provide all the details, we can try to read between the lines.

  1. The Court of Appeal decision does not mention whether the management team actually had any kind of formal or informal training about investigating harassment or workplace misconduct. Without training, it is very difficult to conduct a fair and thorough investigation.
  2. Pinnock was not suspended during the term of the investigation. Given the nature of the complaints, i.e. harassment and reprisal, employees may well have been reluctant to have been candid with the management team when Pinnock was still actively in charge of the east-side Windsor location. After all, some of these employees had seen Boucher been subject to “unrelenting” abuse after standing up to him.
  3. The management team may have had a bias, conscious or unconscious, because of the team’s prior interactions with Pinnock and/or Boucher. Remember, Boucher was a recently-hired assistant manager, while Pinnock had been a manager for some time.
  4. The Store’s People Manager or Human Resources Manager noticed that Boucher looked ill and requested that Pinnock change his behaviour with respect to her and was told, “not until she f***g quits.” She did not raise Pinnock’s inappropriate conduct and her concerns about the impact it was having on Boucher’s health with senior management. Why not? The failure of the People Manager to take active steps to stop Pinnock’s behaviour suggests there were systemic issues at Wal-Mart, far beyond the conduct of one store manager.
  5. Although it is clear that Wal-Mart management spoke to Pinnock about his use of profanity, it does not appear that he was warned about his duty not to retaliate against Boucher for her complaints.
  6. It is unclear how much time is spent in Wal-Mart’s internal training on preventing workplace harassment and bullying.

Conclusion

The moral of the case: it is simply not enough to have great policies on paper. The entire workforce needs to understand what those policies mean and have confidence that if there is a breach, management will react competently and quickly.

The entire case is a disaster for all concerned. Boucher is still not working. With a grade 12 education, it is unlikely that she will be able to find a management job in another workplace in the Chatham-Windsor area. While the money will help Boucher, it will not replace her income loss.

Despite Wal-Mart’s partial victory in court, it was roundly criticized by the Court of Appeal, which concluded:

Wal-Mart took no steps to bring an end to Pinnock’s misconduct.  It did not take Boucher’s complaints seriously, finding them unsubstantiated despite substantial evidence from co-workers that they were well-founded.  It failed to enforce its workplace policies, which on their face were designed to protect employees from the kind of treatment Pinnock subjected Boucher to.  And it threatened Boucher with retaliation for making her complaints, an especially vindictive act.  Despite all of this Boucher was willing to continue to work at the store if Wal-Mart addressed her complaints about Pinnock.  Only when Wal-Mart refused to do so, did Boucher resign.  These considerations show that Wal-Mart’s own conduct justified a separate and substantial award for aggravated damages.

The negative publicity suffered by Wal-Mart was significant. All employers can learn from the Wal-Mart case about what to do (and not to do) the next time an employee complains about harassment and retaliation.