Temperature Rising for Employers that Fail to Adequately Investigate Misconduct

The recent decision of the Ontario Court of Appeal in Boucher v. Wal-Mart Canada Corp. reinforces the need for employers to investigate workplace misconduct complaints seriously. Paying mere lip-service to harassment policies can result in awards of aggravated damages, punitive damages and/or damages for mental distress.

In Wal-Mart, the Court found that the Plaintiff was routinely belittled, humiliated and berated over a six-month period. That conduct seemed to stem from an initial incident where the Plaintiff refused to falsify a temperature-log reading. As a result of the negative treatment that she subsequently endured from her supervisor, she utilized the Defendant’s open door policy and submitted a complaint. The Defendant purported to investigate, but concluded that the Plaintiff’s allegations were unsubstantiated. It also decided that the Plaintiff would be subjected to some form of discipline. Ultimately, the Plaintiff left her employment and claimed constructive dismissal.

The Court of Appeal upheld both the $100,000 award of damages for mental distress and the $200,000 award for aggravated damages. Punitive damages were scaled down to $100,000 from $1,000,000. The Court found that the employer took no steps to put an end to the misconduct endured by the Plaintiff. The Defendant failed to take the Plaintiff’s complaints seriously and considered them to be unsubstantiated, despite substantial evidence from co-workers to the contrary.

Notably, the Court of Appeal found that the employer “failed to enforce its workplace policies, which on their face were designed to protect employees from the kind of treatment [to which the Plaintiff was subjected]”. The Court also noted that the employer threatened the Plaintiff with retaliation for making her complaints, which was viewed as being an especially vindictive act. Those factors justified a separate and substantial award for aggravated damages, in the view of the Court of Appeal.

This decision serves as a cautionary tale for employers to take their own policies and workplace investigations seriously, or else they may face serious financial repercussions.