Canadian HR Reporter

CANADIAN HR REPORTER MARCH 2018 NEWS 9 Still considering her decision, Galea was informed 10 days later her employment was terminated. She also saw her compensation and benefits payments cut off af- ter 11 months, despite signing a non-competition agreement that entitled her to two years' sever- ance pay if she was ever dismissed without just cause. So Galea sued Walmart Canada for the remaining severance owed, and moral and punitive damages. In the end, she was awarded more than $1. 6 million in damages. "She was made to suffer re- peated humiliation," said Justice Michael Emery. "(Walmart) built her up, only to let her down that much more. at corporate be- haviour was not just unduly in- sensitive, it was mean." "(Walmart's) conduct was misleading at best, and dishon- est at worst, in the way the com- pany treated Ms. Galea. Only (Walmart) knew that (her) career was over long before she was ac- tually terminated. To keep her in suspended animation was unduly insensitive conduct." e company's behaviour was "more egregious" than Walmart in the 2014 Boucher v. Wal-Mart Canada Corp. case, said Emery, where the plaintiff was awarded $1 million in damages by a jury (this was reduced on appeal to $100,000). "(Emery) wasn't swayed by the fact that Walmart is the world's big- ger retailer — he looked at denun- ciation and deterrence as being his major factors," said MacDonald. e decision definitely placed a great emphasis on the bad faith manner of dismissal, as Emery found Walmart, in implement- ing major personnel changes, al- lowed Galea "to twist in the wind," she said. "There's no doubt that an employer is able to implement certain, albeit not fundamental, changes, but changes to an em- ployee's employment contract. But certainly you can't carry out a change that is in bad faith, that is misrepresentative of what the em- ployer is saying to the employee; in other words, you can't have an employer saying one thing but turning around and doing some- thing else, and this case really il- lustrates that." Bad behaviour For Walmart, it wasn't just a mat- ter of oversight, said Andrew Vey, founding partner at Vey Willetts in Ottawa. "ey just strung her along, and that… for the court, really was the tipping point that pushed them to say, 'is is the type of case where extraordinary damages are appro- priate,'" he said. "Sometimes when you have a broader restructuring, as seems to be the case here for Walmart, it's possible that individual em- ployees can get lost in the shuffle, where nobody is managing the details closely enough to realize some of the knock-on conse- quences on the individual level." Clearly, something fell apart in this situation, said Vey. "If there is a takeaway, it's that employers need to be more mind- ful than ever in terms of how they conduct themselves both during the dismissal process, and in any subsequent litigation, because if you do it wrong, you can find yourself on the end of a nasty ex- traordinary damages award." It's possible Walmart had the idea that to dismiss Galea would have been cruel and harsh, and it was looking around for a role that was appropriate, said Erin Brandt, lawyer at Kent Employment Law in Vancouver. "If they had decided they were going to terminate the relation- ship, they should have done it, ripped off the Band-Aid. Drag- ging it out over a period of sev- eral months is actually worse for an employee, it doesn't allow her to leave with her head high and look for a position where she will be valued and respected. Instead, she was jerked around for months until finally Walmart said, conclusively, 'No, this is it, we're done.'" And because the conduct hap- pened at the highest executive lev- el of the company, the court really wanted to send a strong message that the conduct was not accept- able, she said. "ere's a higher standard for the leadership, and I think the bottom line is that em- ployers have an obligation to treat their employees fairly and honest- ly in the course of dismissal." When it comes to moral dam- ages, it's about the mental distress associated with the manner of dis- missal, said Brandt. "It all boiled down to the fact Walmart misled her over an ex- tended period of time, and there were all these little pieces of it that slowly chipped away at her dignity. Each of those instances, on its own, I don't think would have been sufficient for this kind of award, but ultimately what was important was the court said, 'is came from the highest lev- els of management, this isn't some rogue… mid-level manager or low-level supervisor who's gone rogue and hadn't contacted HR like they're supposed to — this is the leadership of an incredibly large company who should have known better and they misled her and that's not fair." Justice Emery made a finding that people knew what was go- ing on but no one did anything about it, said MacDonald, "and that's pretty tragic, for any orga- nization… It's the leadership, but I would put HR in there as well, I think it affects everybody." e moral damages given also ends the long-standing debate in Ontario, and affirms the prin- ciple, that no medical evidence is required in support of an award of moral damages, said MacDonald, author of Extraordinary Damages in Canadian Employment Law. "Everybody is unique, and ev- erybody's approach to stress and anxiety and distress is different... this is very precedential." Moral damages are pretty rare, and often it's about more than the average pain and depression asso- ciated with losing a job, said Vey. "The courts recognize that you're vulnerable in those circum- stances and an employer that con- ducts itself particularly poorly, is unduly sensitive to you or causes you undue harm, there can be damages associated with that." Generally, punitive damages are there for particularly repre- hensible conduct, where the court really wants to send a message to all employers to say, "is is the type of stuff you can't do," he said. "It's always a little hard to sepa- rate out some of the bad faith moral damages from punitive damages… but when you read the case from top to bottom, all 100 pages of it, you get a clear impres- sion that the court was disgusted by how this person was treated, and the damages reflect that." Issues during litigation e damages in the case also took into consideration Walmart's be- haviour during litigation. e retailer was "either purpose- ly dilatory in instructing its counsel to provide disclosure and to con- duct examinations for discovery, including the legal obligation to provide answers and supporting documents to (fulfill) undertak- ings on a timely basis," said Emery. "Alternatively, (Walmart) was indifferent to Ms. Galea's claims. As a result, this purposeful delay or indifference caused mental dis- tress for Ms. Galea that exceeded the normal stress and hurt feel- ings that accompany a dismissal." "Galea was entitled to a respect- ful and responsive approach to de- fending the action while (Walmart) defended vigorously, not a deafen- ing silence where indifference bor- dered on disdain towards her." Although the judge did not fault the retailer's legal counsel, he found that the company de- layed answering undertakings until the eve of the trial, then fol- lowed with a "torrent of produc- tions," said MacDonald. "To me, it's just such a com- mentary about how to not con- duct oneself during litigation, and I'm not talking about the counsel for Walmart, I'm talking about Walmart and whoever was inter- nal at that time." Part of the problem for an em- ployer like this is it lends optics to the court that perhaps this is all just part of a broader hardball litigation strategy, said Vey. "You're trying to put screws to the employee to see if they'll take a bad settlement." It is very common for employ- ers to take a hard-line approach with employees, with the perspec- tive they want to deter employ- ees from bringing these kinds of claims forward, said Brandt. "I do applaud the court in say- ing, 'at's really not fair, there's a power imbalance here and the least you could do is defend the action with respect.'" "Normally, conduct through litigation is awarded through costs, and there are significant court limits on what's allowable with respect to costs," she said. "But in this case, (it) said that (Walmart's) conduct through litigation was all connected to the manner in which they dismissed her — those aren't separate… and they gave her $200,000 for dismissal, and another $50,000 for litigation conduct, which is really unique. So I think that's a warning to employers that their conduct through litigation can come back to bite them." ipm The Professional Recruiter Full Accreditation Program on Mixed Media USB Flash Drive Institute of Professional Management 2210-1081 Ambleside Drive, Ottawa, ON, K2B 8C8 Tel: (613) 721-5957 Toll Free: 1-888-441-0000 Details at : www.workplace.ca/HR-Reporter.html valid until April 5, 2018 This new mixed media package includes a USB Flash Drive with over 200 minutes of audio visual clips, participant workbook and exam. $720 regular $845 ... save $125 This program covers a set of key recruitment and selection skills. The goal is to help you reduce recruitment costs, lower the risk of bad hiring decisions and avoid needless litigation. Successful completion of all 3 Modules makes you eligible for membership in the Association of Professional Recruiters of Canada, APRC, with the RPR (Registered Professional Recruiter) designation. Compensation Surveys Incentive Programs Job Descriptions Job Evaluation Pay Equity Performance Appraisal Salary Administration Sales Compensation (416) 498-7800 info@resourcecorporation.com www.resourcecorporation.com COMPENSATION CONSULTING Damages take litigation behaviour into account WALMART < pg. 1 "is purposeful delay or indifference caused mental distress for Galea that exceeded the normal stress and hurt feelings that accompany a dismissal."

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