Setting Things Right: The Court of Appeal Boosts Damages to Almost $250,000
In a Fall Employment newsletter for Stancer Gossin Rose about punitive damages, compensation from the Court to punish bad conduct (read the full newsletter here), I wrote the following about the case of Ms. Vicky Strudwick ("Strudwick"):
In Strudwick v. Applied Consumer & Clinical Evaluations Inc., 2015 ONSC 3408, the Plaintiff had been with her employer for 15 years when an illness caused her to lose her hearing in 2010. She requested a number of accommodations from her employer, including a visit from the Canadian Hearing Society, TTY telephone equipment, a visual fire alarm, and the use of the service dog. Despite many of the accommodations being of no cost for the employer, it refused, instead pressuring the Plaintiff to go on disability leave. After an embarrassing incident while asked to speak publicly in front of her coworkers, the employee was terminated.
In his ruling, Mr. Justice Dow ruled strongly against the employer. Along with 24 months of notice and benefits, human rights damages, and money to compensate for psychological treatment, the court found that the employer’s conduct met the threshold for punitive damages, and awarded an additional $15,000. This was topped off by a further $40,000 in costs.
Now, in a newly released decision from the Court of Appeal (2016 ONCA 520), the Court of Appeal raised Strudwick's damages to just over $246,000 dollars. Here's why:
Strudwick had appealed the previous decision on the basis that the amounts awarded were simply too low. The employer, Applied Consumer & Clinical Evaluations Inc. ("Applied") did not challenge the amount of damages awarded, but did cross-appeal to have the costs award cut in half.
In restating the circumstances surrounding Strudwick's termination, the Court outlines just how blatant Applied's harsh and demeaning conduct was. Not only did the employer resist making free accommodations that would have helped Strudwick navigate the workplace with her hearing loss, but they went out of their way to make things more difficult.
"For example, Ms. Camilleri [Strudwick's supervisor] would purposely give Ms. Strudwick instructions in a manner that prevented her from lip reading. Then, Ms. Camilleri would call Ms. Strudwick “stupid” for not understanding the instructions. Ms. Camilleri would chastise Ms. Strudwick for not answering the telephone. Mr. Hoffman demanded that Ms. Strudwick produce a doctor’s opinion as to the precise cause of her hearing loss. Since, as previously mentioned, the doctors were unable to identify the cause of Ms. Strudwick’s hearing loss and so instead she provided Mr. Hoffman with hearing test results. In response, Ms. Camilleri accused Ms. Strudwick of being “too cheap” to produce a doctor’s note."
Whether or not the employer did not believe in Strudwick's hearing loss, or had some abnormal bias against deafness, this same sort of unconscionable treatment is akin to bullying an employee undergoing chemotherapy, or undergoing a traumatic loss.
While Strudwick attempted to claim for over one million dollars in damages, the Court ruled that because her original statement of claim cited only $240,000, governing legal principles limited her appeal to that amount. As the Court cited The Honourable Justice Binnie (as he then was) in Whitten v. Pilot Insurance, 2002 SCC 18, "“One of the purposes of a statement of claim is to alert the defendant to the case it has to meet, and if at the end of the day the defendant is surprised by an award against it that is a multiple of what it thought was the amount in issue, there is an obvious unfairness.” Furthermore, the Court held that despite Strudwick's claim she should be compensated until she reached age 65, the 20-months pay in lieu of notice she was previously granted by the lower court was not unreasonable.
Rather, the Court of Appeal altered Strudwick's total damages primarily based under four key groups - damages under the Human Rights Code, intentional infliction of mental distress, aggravated damages, and punitive damages. For length, I will refrain from going into the Court's ruling on each specific head of damages, but there are key points that are worth noting.
For damages under Ontario's Human Rights Code, the Court of Appeal noted while the previous judge had found Applied's conduct "unconscionable," he failed to take into account the impact that the behaviour had on Strudwick's mental health. Strudwick had let the conduct go on for months before taking action for fear of losing her job, and had subsequently been diagnosed with depression, anxiety, and an adjustment disorder for which she was pursuing treatment. Furthermore, it was not just that Applied did not accommodate Strudwick - they actually went out of their way to make her working life more difficult, in an effort to drive her from the company. After analyzing relevant previous decisions, the Court found that these damages should come to $40,000.
For the intentional infliction of mental distress, the Court took into account the costs of Strudwick's psychotherapy to deal with her mental health issues caused by her employment, as well as further consideration for mental distress, and raised the amount to just over $35,000.
Under aggravated damages, the Court considered the extreme nature of Applied's conduct in relation to other cases, and noted how the conduct did not stop after Strudwick was terminated. When she refused to sign a release, Applied refused to pay her monies she was rightfully owed, and then intentionally delayed her ability to claim receive employment insurance. The Court raised this amount to $70,000.
Lastly, under Strudwick's claim for punitive damages, the Court held that the above amounts were still insufficient to accomplish the full aim of penalizing Applied's years of misconduct, and while Applied's modest financials were given some consideration, the Court awarded an additional $55,000 in punitive damages. In total, the amount total reached close to $250,000, and then was marginally reduced to align with Strudwick's original claim. Not only did the Court reject Applied's cross-appeal to reduce the original costs award, but Strudwick was awarded an additional $20,000 to cover the costs of her appeal.
This decision should make employers, employees, and lawyers all sit up and take notice. For employers, the lessons are clear - workplace bullying is not only against the law, but this type of despicable treatment is simply never allowable, and an employer will likewise be punished severely for it. A Court of Appeal decision means this case will now be given a high degree of notice in future similar circumstances, and examples of similar conduct by employers are likely to see similar penalties from the courts.
It is also worth noting that the Court took note of Applied's conduct following Strudwick's termination. With the exception of the most extreme circumstances, employees have a variety of rights upon termination to monies that may be owing under the relevant legislation. It is always best to consult a lawyer prior to a termination to ensure that all necessary steps are taken and all amounts owing are paid out to avoid unnecessary difficulties later on.
For employees, and their counsel, this is an example of the power of the courts to set things right. While Strudwick did receive a sizeable award from the lower court, she appealed on the basis that it was 'not enough,' and the Court of Appeal agreed. If anything, the Court took steps to limit the award based on the restrictions imposed by Strudwick's original claim - a caution to lawyers moving forward. While this new total will still not compensate for the damage to Strudwick's mental health, it will assist with her medical bills, and provide her an added level of financial security.
The bottom line - Mistreating employees is not only wrong, it is in clear violation of several areas of law, and the penalties can be costly!