Bullying a fired worker comes with consequences: Pluto
By Tony Poland, AdvocateDaily.com Associate Editor
Pluto, an associate with Gaertner Baron Professional Corporation, says a recent Ontario Court of Appeal decision — which upheld a $125,000 judgment for a man who was fired and then threatened with a $1.7-million lawsuit if he pursued a wrongful dismissal claim — is a warning to employers.
“It's a lesson to employers to be mindful that they have an obligation to conduct themselves in good faith," she says. "They have an obligation when they terminate a worker to act fairly, and starting a meritless counterclaim does not accord with that.”
Court heard that in June 2015 a man was told he was being terminated from his job because he had committed fraud, although no specifics were given.
The man advised his employer that he intended to hire a lawyer, and the company threatened a counterclaim.
About a month later, the man filed a lawsuit, and the employer responded with a statement of defence and counterclaim in which it alleged cause, seeking damages of $1.7 million for unjust enrichment, breach of fiduciary duty and fraud, as well as $50,000 in punitive damages.
When the matter went to trial, the judge ruled that the employer had failed to prove any of its allegations against the ex-worker.
The judge also found that the $1.7 million counterclaim “had been a tactic to intimidate” him and that the company had “breached its obligation of good faith and fair dealing.”
The man was awarded $100,000 in punitive damages and $25,000 in aggravated damages.
“It’s interesting that aggravated and punitive damages were awarded,” says Pluto, who was not involved in the matter and comments generally. “This case highlights the fact that pre- and post-termination conduct can and does affect what type of damages can be awarded and the amount involved.”
She says the punitive damages were awarded for “conduct that is egregious by the employer.”
“Aggravated damages are rather exceptional and are designed to compensate the employee for the humiliation, embarrassment, and stress that he suffered as the results of the wrongful conduct,” Pluto says.
She says there is “inherently nothing wrong with the employer commencing a counterclaim.”
However, “meritless counterclaims that are really designed to intimidate the employee” can come with consequences, Pluto says.
“This case reminds us that pre- and post-termination conduct, including ‘litigation conduct’ like starting a counterclaim that has no merit, will be considered by the court and can very well be a factor in awarding damages,” she says.