Employment & Labour

MacDonald's client awarded $1.6 M in case against retailer

By Peter Small, AdvocateDaily.com Contributor

A woman represented by Toronto employment lawyer Natalie MacDonald has won one of the largest punitive and moral damage awards in Canadian employment law against a retailer for conduct a judge called “callous, high-handed, insensitive and reprehensible.” See Toronto Sun Canadian Lawyer

Ontario Superior Court Justice Michael Emery awarded a former executive of the retailer $500,000 in punitive damages to deter the company from engaging in similar behaviour in the future, he said in his Dec. 7 judgment.

“She was made to suffer repeated humiliation,” Emery wrote. “[The company] built her up, only to let her down that much more. That corporate behaviour was not just unduly insensitive, it was mean.”

The judge awarded the woman a further $250,000 in moral damages, the highest in Canadian employment law, says MacDonald, principal of MacDonald & Associates.

MacDonald, author of Extraordinary Damages in Canadian Employment Law, acted for the plaintiff along with associate Cody Yorke.

“This is about how not to dismiss an employee,” MacDonald tells AdvocateDaily.com.

“This is about how not to embarrass and humiliate an employee, and about how an organization must conduct itself throughout as appropriate.”

The woman’s total award, including lost wages, benefits and stock options, is more than $1.6 million.

MacDonald says her client feels vindicated by the judgment. “She’s thrilled and elated.”

The merchandising executive was a “rising star in the [company] firmament” after she was hired in 2002, Emery wrote. “Little did she know that [the company] would stall her ascent, leaving her to fall with no one to catch her,” he added.

The company breached its implied duty of good faith after it relieved her of her senior responsibilities on Jan. 29, 2010 and left her to “twist in the wind” in an ad hoc position as she searched for a new role in the company, the judge said.

The company’s Canada CEO at the time decided to “dismiss or denigrate [the executive] to the point where she might resign. Thus began the long good-bye that would last until Nov. 19, 2010,” Emery said.

The CEO admitted he downgraded her performance rating without her knowledge, the judge said.

This unilaterally reduced the executive’s rating from “superstar to not promotable,” MacDonald says.

The judge called the company’s conduct “misleading at best and dishonest at worst. … Only [the company] knew that [her] career was over long before she was actually terminated.”

MacDonald believes this behaviour is why the judge set the punitive and moral damages so high, along with the fact that the company’s actions were undertaken by highly placed executives at the company. “In his view, those amplified the damages necessary to chastise [the retail giant]” she says.

The judge found that the company’s behaviour was “more egregious” than it was in another case involving the same retailer where the plaintiff was awarded $1 million in damages by a jury, reduced on appeal to $100,000 in 2014. In that matter, the retailer did not intercede in the “reprehensible conduct” of the plaintiff’s immediate superior, Emery wrote.

In the 2017 case, there is no such distinction because the decisions to treat her with “callous indifference were made on behalf of the company,” the judge said.

The sole income earner for her family, which included two school-age children, the plaintiff was bound by a two-year non-compete clause after termination, the judge said. During that period she was supposed to receive all of her compensation; nonetheless, the company stopped all payments 11.5 months later without notice, Emery wrote.

The company responded to her lawsuit with a “deafening silence, where indifference bordered on disdain towards her,” the judge said.

Although the judge did not fault the retailer’s legal counsel, he found that the company delayed answering undertakings until the eve of the trial, then followed with a “torrent of productions.”

MacDonald says the lesson for mistreated employees is to take careful notes, as the plaintiff did. The judge relied on her evidence over that of her former boss because she took notes of everything after things went sour, MacDonald adds.

“An employee who chooses to take notes and actually makes sure they capture the behaviour in emails is going to have a far better time proving a case if the employer does not, in fact, do the same,” MacDonald says. “When a judge looks at trying to decide who is more credible, it’s the paper trail that wins every time.”

The judge found the company’s conduct to “‘starve the plaintiff into trial" is equally reprehensible” as another employer’s conduct in a 2008 case, where the employee was awarded $500,000 in punitive damages for the tort of malicious prosecution after he was wrongfully accused of theft and had to endure two criminal trials and an appeal.

MacDonald notes that the judge found the facts of the 2017 matter to call for punitive damages closer to those in an unrelated 2013 case, where a defendant who was forced to defend himself in a criminal trial to seek vindication was, on appeal, awarded $450,000 in punitive damages.

“The retailer needed to have a large whack of punitive damages in order to understand its own misconduct,” MacDonald says.

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