In a recent case, a female employee asked her employer not to hire a male executive because he had sexually harassed her when he had been employed earlier. The employer refused, the employee quit, and claimed, among other things, wrongful dismissal damages and punitive damages.
This case deals with the conflict between an employer’s right to hire whomever it wishes and its obligation to provide a safe and discrimination free workplace.
In 1995, Mr. Benoit sexually harassed Ms. Colistro who reported to him as well as other employees. This misconduct was one of the reasons he was terminated without just cause.
In 2007, Ms. Colistro found out the Company intended to rehire Mr. Benoit and she immediately told the hiring manager about the earlier sexual harassment and asked that Mr. Benoit not be re-hired. The hiring manager sent Ms. Colistro a letter that stated, “there is no legal or other reason to not go forward with hiring Mr. Benoit.”
Three days later, Ms. Colistro told the hiring manager that she was “not eating or sleeping, was vomiting and on the verge of a nervous breakdown.” She saw her doctor, who provided a note advising that she would be off work due to stress. The Company offered to accommodate Ms. Colistro by transferring her to an equivalent position in an adjacent building. But she would accept nothing less than the Company not proceeding with the hiring of Mr. Benoit.
Ms. Colistro resigned her employment claiming she was constructively dismissed because continued employment would be intolerable.
Constructive Dismissal Claim
The trial judge concluded Ms. Colistro was constructively dismissed because, among other things, the letter which stated “there is no legal or other reason to not go forward with hiring Mr. Benoit” was demeaning, dismissive and “re-victimized the plaintiff and minimized the past conduct of Mr. Benoit in the eyes of the plaintiff and other (Company) employees.” He awarded her damages based on a 12-month notice period. The Ontario Court of Appeal (the “OCA”) upheld these damages.
The trial judge found that the Company’s conduct toward Ms. Colistro was flagrant and outrageous and ordered it to pay her $ 100,000 in punitive damages. In doing so, he found the treatment of Ms. Colistro to be grossly unfair, unduly insensitive, and in blatant disregard of her interests. The judge also referenced the extensive expert medical evidence which established that Ms. Colistro “suffered actual damages as a direct result of the way in which she was treated by the Company at the time of her dismissal.” The OCA also upheld these damages.
Even though the trial judge awarded Ms. Colistro constructive dismissal damages and punitive damages, he ordered Ms. Colistro to pay costs to the Company in the amount of $150,000 and to the City of Thunder Bay in the amount of $50,000. The OCA upheld this cost order. So even though Ms. Colistro “won” this case, it cost her money to do so.
Lessons to be Learned:
- An employer has an obligation to provide a safe and healthy workplace that is discrimination free. If an employee claims to feel unsafe, then carefully listen to the employee and seriously consider these concerns.
- When dealing with a vulnerable employee take the high road if at all possible. This will reduce or eliminate the risk of a punitive damages award.
- Always consider making a formal offer to settle under the Rules of Civil Procedure. An employee thereafter takes an unreasonable settlement position at their peril.
For 30 years, Doug MacLeod of the MacLeod Law Firm has been advising employers on all aspects of the employment relationship. If you have any questions, you can contact him at 416 317-9894 or at [email protected]
Duty of Good Faith: Do Employers Have a Duty to Disclose Material Facts to Employees Who are Making Employment Related Decisions?
The Facts Mr. Jonasson, a 55 year old engineer with 22 years’ service with Nexen Energy was thinking about either retiring or taking a leave of absence. He decided to request a six month leave of absence. The employer agreed to his leave request if he entered into the...read more
A recent case underscores the importance of including a properly drafted termination clause in your organization’s employment contract. The Facts In March 2010, CIGI hired Mark Menard, a chartered accountant, as Senior Director of Finance. He was responsible for the...read more
If you are a director or a party to a unanimous shareholder agreement did you know that you are personally liable for unpaid wages and you could go to jail for up to one year for failing to pay them? So if you are a small business owner, have signed a unanimous...read more