Blog Post #338 – Above and Beyond – The WalMart Judgement

Excerpt from the OH&S Canada Magazine

By: Samuel Dunsiger

January/February 2013

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The massive $1.46 million in compensation awarded last October to a former WalMart employee in Windsor, Ontario has cast a spotlight on bullying and harassment in the workplace.

In September, Meredith Boucher from Chatham, Ontario, filed a lawsuit against WalMart Canada Corp. and Jason Pinnock, her former manager. Boucher alleged that she was forced to leave her position in November of 2009 after suffering mental abuse from Pinnock, who belittled and demeaned her job performance in front of employees she supervised and regularly spoke to her in a coarse and profane manner, notes the statement of claim.

Sheri-Lynn Medaglia, a lawyer with Windsor-based Shulgan Martini Marusic LLP who served as Boucher’s counsel, calls the case “something out of the ordinary” of most wrongful dismissal claims. “The compensation was awarded due to the level of abuse that Ms. Boucher endured,” she says.

Apart from the intentional infliction of mental suffering, she also sought compensation for damages that included sexual harassment, discrimination and assault by an assistant manager, who punched her in the arm on more than one occasion. The statement of claim adds that Pinnock’s conduct constitutes constructive dismissal by creating a “work environment in which no reasonable person would be expected to continue.”

The jury of six unanimously ruled that Boucher was constructively dismissed, which is a form of wrongful dismissal, notes Michele Hollins, a lawyer with Dunphy Best Blocksom LLP in Edmonton. “One in which the employer does not expressly terminate the employment contract but effectively changes the job description or the work environment of the employee so fundamentally that the employee’s job can be said to no longer exist,” Hollins explains. She was awarded $1.21 million against the corporation – $20,000 for breach of contract, $200,000 in aggravated damages, $1 million in punitive damages and $10,000 for assault. She was also compensated $100,000 in damages against Pinnock for inflicting mental suffering and $150,000 in punitive damages.

DESIGNING DETERRENCE

“An award of punitive damages is always based on the facts of each case,” Medaglia points out, noting that the purpose of the award is to punish or deter the party from undertaking similar wrongdoings in the future.

If the general damages award is not deemed sufficient to serve that purpose, punitive damages can apply. “In this case, the award reflects the jury’s view of the severity of the conduct and the need to deter,” she suggests, noting that the seriousness of the offence – not the size of the company – influences the amount of punitive damages awarded.

“Punitive damages are intended for conduct that is so malicious and outrageous that it is deserving of punishment on its own and only in exceptional cases,” says Carolyn Johnston, a lawyer with Torkin Manes LLP in Toronto. “Punitive damages must focus on the defendant’s misconduct, not on the plaintiff’s loss.”

Hollins suggests that “it would make sense that a large company might be the subject of a larger punitive damage award to accomplish that level of deterrence.”

Alex Roberton, a spokesperson for WalMart Canada Corp. in Mississauga, Ontario, says the company is disappointed with the decision and surprised by the exceptional damages awarded. “We are reviewing the decision in detail and will consider all options, including the possibility of an appeal. WalMart is built on a culture that insists on respect for the individual at all times, without exception, and we will continue to promote respect in every area of our operation.”

Jacqueline Power, assistant professor at the Odette School of Business at the University of Windsor, says even if an appeal is launched, the damage is already done as “these large settlements are publicized and that negative information has hit the market. It motivates [the company] to make a change.”

Boucher’s lawsuit was one of four against WalMart Canada Corp. Three female assistant managers from the east Windsor store, each alleging in separate statements of claim that they suffered similar mistreatment from Pinnock and another manager in 2009 and 2010, are seeking at least $50,000 in damages.

WIDER MESSAGE

Power says this case may influence how workplace bullying is approached. To her knowledge, this is the largest settlement of its kind in Canadian history. “This is something employers will notice,” she suggests. Power compares the potential impact of this case to sexual harassment, which was an issue that organizations did not take seriously years ago, until heavy-handed settlements changed the public’s attitude.

Johnston says the ruling serves as a good reminder for employers to ensure that they not only have sound harassment policies in place, but that these policies are followed.

For Medaglia, the case “sends a message to employers that workers will not tolerate workplace harassment and that it is imperative for employers to intervene.” She suggests that jurors were displeased with the corporation’s failure to respond to the identified concerns and wanted to ensure that similar events would not be repeated in the future.

“I hope the WalMart case will bring players to understand that [workplace bullying] isn’t a joke,” says Jim Wright, national health and safety specialist with the United Food and Commercial Workers’ Canada union in Toronto. “It is very, very serious.”

Power notes that workplace bullying can lead to higher turnover and lower productivity for the company. The physical and mental effects on employees who are bullied at work range from chronic stress and depression to heart disease.

According to the statement of claim, Boucher’s mistreatment “caused her to suffer stress and anxiety to the extent that she was required to seek medical treatment and to receive prescription medication.”

Boucher’s shift duties require her to be responsible for the operations in various store departments, including maintaining records to ensure that store procedures adhere to company requirements and health regulations.

Pinnock began a pattern of conduct to punish Boucher after she refused to falsify maintenance and temperature logs when it came to light that a staff member did not complete the logs for the bakery and dairy departments over the Victoria Day weekend. Boucher was terminated without notice or cause, notes the statement of claim.

Medaglia adds that constructive dismissal may be established where the employer makes a substantial change to a fundamental term of the employee’s contract without the employee’s consent, or where working conditions have become so intolerable that the employee has no alternative but to resign. This can include changes in salary or responsibilities.

“True workplace bullying creates a hostile and untenable environment in which no employee should be without redress,” Hollins says, adding that the threshold for proving constructive dismissal is always a matter of degree. “How different is the current situation from the initial employment contract or, in the case of workplace harassment, from a reasonable or tolerable workplace?”

A FINE LINE

Boucher’s refusal to falsify maintenance records also brings to light the issue of workplace insubordination. “If I ask you as an employer to rob a bank, it is not insubordination since it is against the law,” Wright cites by way of example. “If I ask you to go help load the truck and if you say, ‘No, that is not part of my job,’ then that is insubordination.”

Wright notes that mitigating circumstances need to be considered when dealing with insubordinate employees. They include the employee’s work history, the situation at hand and how long the employee has been with the company.

Power says “the discipline should be task or behaviour-oriented” when addressing insubordination in the workplace.

The high damages awarded in this case underscores the importance of not taking workplace harassment lightly. “There has been a movement towards stopping bullying both at the workplace and elsewhere,” Wright says. “The WalMart decision brings to light these things.”

My opinion,

I think everything was said that was needed to be said. Section 32.0.1 of the OHSA was created because the Ministry of Labour realized that workplace violence and harassment was becoming more of a threat to the workplace and was being recognized and a leading cause of workplace absenteeism. Sexual harassment was been on the books for a while now but violence and any other type of harassment needed to be covered.

Even WALMART has to comply!

Remember — In Ontario, “ALL Accidents are Preventable”

HRS Group Inc. has a great team that can help you with all your health and safety needs including ‘Workplace Harassment and Violence’. Contact Deborah toll free at 1-877-907-7744 or locally at 705-749-1259.

We can also be reached at 

‘Work’ and ‘Play’ safe.

Daniel L. Beal
CHSEP — Foundation Level
VP & Senior Trainer
HRS Group Inc.