Ontario Court of Appeal reduces million dollar punitive damages award against Wal-Mart

On May 22, 2014 the Court of Appeal for Ontario released its decision in Boucher v. Wal-Mart Canada Corp. and reduced a jury award of $1,000,000 in punitive damages to $100,000.

Boucher was an assistant manager at the Windsor Wal-Mart. Over a period of several months, her manager harassed, demeaned and intimidated her, which included attempts to humiliate Boucher in front of other staff and customers.  Boucher eventually complained to senior management about her manager’s misconduct.  Following an inadequate investigation, Wal-Mart found that the complaints were unsubstantiated and stated that Boucher would be held accountable for making them.  Her workplace harassment continued and Boucher eventually quit and sued Wal-Mart for constructive dismissal.

The action was tried before a judge and jury.  The jury found that Boucher had in fact been subject to ongoing abuse and that Wal-Mart did nothing to stop it.  Although there were policies in place to prevent and address workplace violence and harassment, in this case it appeared that Wal-Mart merely paid lip service to those policies.  The jury found that Boucher was constructively dismissed and awarded Boucher $200,000 for aggravated damages for the manner in which she was dismissed, and $1,000,000 in punitive damages.  The jury also awarded Boucher damages against the manager in the amount of $100,000 for intentional infliction of mental suffering, and $150,000 in punitive damages.  Wal-Mart and the manager appealed these awards. Boucher cross-appealed against Wal-Mart and the trial judge’s ruling that her claim for future loss of income was limited to the amount provided for in her employment contract.

The Court of Appeal upheld the jury’s awards of $100,000 against the manager for intentional infliction of mental suffering, and $200,000 against Wal-Mart for aggravated damages for the manner of dismissal.  The punitive damage awards were reduced from $150,000 to $10,000 in the case of the manager, and from $1,000,000 to $100,000 in the case of Wal-Mart.  In reducing the punitive damage awards, the Court of Appeal held that in light of the significant compensatory damage awards ($300,000), the reduced amounts were all that was necessary to sufficiently punish Wal-Mart and the manager, and to denounce and deter their conduct.  In Wal-Mart’s case, the Court of Appeal found the evidence reasonably supported the jury’s finding that Wal-Mart’s own conduct was reprehensible, specifically Wal-Mart refused to take Boucher’s complaints about her manager seriously, it dismissed those complaints as unsubstantiated despite substantial evidence to the contrary, it was unwilling to discipline the manager or intervene to stop his continued mistreatment of Boucher, it threatened reprisal against Boucher and it contravened its workplace policies. However, the Court also noted that Wal-Mart’s misconduct lasted less than six months, it did not profit from its wrong, and while it obviously maintained a power imbalance over Boucher, it did not set out to force her resignation.

The Court of Appeal dismissed Boucher’s cross-appeal finding the trial judge correctly ruled that as Boucher had not suffered a loss of earning capacity, her loss of future income claim was limited to the amount provided for in her employment contract.

In our view

Even taking into account the reduced punitive damage awards, the total liability for Wal-Mart in this case was significant.  The decision drives home the importance of not only having workplace policies to prevent harassment and violence, but to implement and use them.  Employers must take complaints of harassment seriously and conduct a proper investigation where such complaints are made.

For further information, please contact Jock Climie at (613) 940-2742.


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