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Boucher v Walmart - a lesson to whom?

Punitive Damages in Employment Law

The Ontario Superior Court handed down one of the largest damage awards in Canadian history in an employment law context this year. On appeal, the Ontario Court of Appeal greatly reduced the damage award against Walmart and one of it's supervisors. The award is still significant after appeal and it leaves us with some important factors to consider, both as an employee and as an employer.

The case demonstrates how, even with good written policies, a sophisitacated company or organization can be liable for the misconduct of one of its own employees. You can read the appeal for yourself over here.

 

The Court of Appeal

Justice Laskin writing for the Court of Appeal provided the following overview:

[1] The respondent Meredith Boucher began working for the appellant Wal-Mart in 1999. She was a good employee. In November 2008 she was promoted to the position of assistant manager at the Wal-Mart store in Windsor. Her immediate supervisor was the store manager, the appellant Jason Pinnock.

[2] At first Boucher and Pinnock worked well together. Their relationship turned sour, however, after an incident in May 2009 in which Boucher refused to falsify a temperature log. Pinnock then became abusive towards her. He belittled, humiliated and demeaned her, continuously, often in front of co-workers. Boucher complained about Pinnock's misconduct to Wal-Mart's senior management. They undertook to investigate her complaints. But in mid-November 2009 they told her that her complaints were "unsubstantiated" and that she would be held accountable for making them. A few days later, after Pinnock again humiliated Boucher in front of other employees, she quit. A few weeks later she sued Wal-Mart and Pinnock for "constructive" dismissal and for damages.

[3] The action was tried before a judge and a jury. The jury found that Boucher had been constructively dismissed and awarded her damages equivalent to 20 weeks salary, as specified in her employment contract. The jury also awarded her damages of $1,200,000 against Wal-Mart, made up of $200,000 in aggravated damages for the manner in which she was dismissed, and $1,000,000 in punitive damages. And the jury awarded Boucher damages of $250,000 against Pinnock, made up of $100,000 for intentional infliction of mental suffering, and $150,000 in punitive damages (awards for which Wal-Mart is vicariously liable as Pinnock's employer).

[4] On appeal, Pinnock and Wal-Mart challenge both their liability for and the amount of damages for intentional infliction of mental suffering, aggravated damages and punitive damages.

The Superior Court:

The original case was heard in Windsor Ontario in front of a Jury. The Jury awarded as follows:

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 were assessed against the defendants at $140,000. The total award was about $1,450,000.

At the Court of Appeal, the damages were reduced.

The majority of the court found that the damages were excessive and not rationally required to punish Pinnock or Walmart, given the high awards for other damages. The court reduced the punitive damages against Pinnock to $10,000 and against Walmart to $1000,000. The result was a reduction of over a million dollars to Boucher.

Despite the reduction in the award, the Court maintained that the conduct of Walmart was reprehensible and could still attract punitive damages. Laskin wrote

[84] Moreover, the evidence reasonably supports the jury's finding that Wal-Mart's own conduct was reprehensible. That evidence, which I reviewed earlier, includes Wal-Mart's refusal to take Boucher's complaints about Pinnock seriously, its dismissal of those complaints as unsubstantiated despite substantial evidence to the contrary, its unwillingness to discipline Pinnock or intervene to stop his continuing mistreatment of Boucher, its threatened reprisal against her, and its contravention of its workplace policies. Although Wal-Mart may not have deliberately sought Boucher's resignation, on the evidence led at trial that the jury undoubtedly accepted, Wal-Mart's actions and its inaction were reprehensible.

The Moral of the Story:

It isn't enough for a company to have good policies on paper. All employees, managers etc. need to understand the policies. Employees need to be able to have confidence in their employers. If there is a breach of a policy, an employee needs to be able to count on their employer that there will be a swift, professional reaction.
The case is also a signal that tIf you are an Employer, take the time to review your policies and ensure that your management team and employees understand them. Employment Lawyers can help guide you through your own policies and suggest ways of implementing and changing as required. If you don't have policies on paper, consider making some, and teaching your staff what they mean.
If you are an employee and you feel that your employer is not following their own policies, it may be a good idea to consult with an employment lawyer.
Remember, everyone's situation is unique. The blogs posted on this site are informational. They are not intended to be taken as legal advice for your situation. It is always a good idea to seek professional legal advice before making any decisions related to your particular case.

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