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The same conduct may ground an award of damages for sexual harassment and moral damages

By Nadia Zaman

In a blog post about the Harvey Weinstein scandal and sexual harassment, Toronto lawyer Stuart Rudner of Rudner Law asserted that after the scandal took place, sexual harassment could no longer be seen as a “cost of doing business.” That may leave you wondering: what is the cost?

Earlier in 2017, the Ontario Court of Appeal heard the case of Doyle v. Zochem Inc., which involved a woman who was sexually harassed at work, and then fired after lodging a complaint. The court affirmed the trial judge’s decision to award the following to her:

  • Damages for wrongful dismissal: $55,849.99;
  • Damages pursuant to the Human Rights Code: $25,000; and
  • Moral damages: $60,000
  • Significantly, much of the same conduct was relied upon to justify the awards for both moral damages and human rights damages, as the court found that the damages serve different purposes.

What happened?

The employee, Melissa Doyle, had been employed by Zochem for nine years as a plant supervisor and health and safety coordinator. She was the only woman working in the plant. Bill Rogers, the plant maintenance manager, sexually harassed her.

A few days before her employment was terminated, Rogers humiliated Doyle in front of other employees, after she raised legitimate safety concerns at the plant. At that point, he knew that the decision to dismiss her had already been made. When Doyle reported the sexual harassment to Stephanie Wrench, the assistant general manager, she did a “cursory” investigation of the complaint and heard from Rogers, but did not give Doyle an opportunity to respond. She also assured her that her job was not in jeopardy, when in fact the decision to dismiss had already been made. Wrench knew that Doyle suffered from clinical depression.

Within a week, Wrench terminated Doyle’s employment without cause. There was evidence that Doyle endured significant mental distress as a result of her employer’s bad faith conduct. She felt “betrayed, abused and upset,” was diagnosed with a major depressive disorder and anxiety, and her application for short-term disability benefits was denied by her employer without adequate evidence. Doyle sued for wrongful dismissal and sought general damages, moral damages, damages for retaliatory discharge and intentional infliction of mental distress, aggravated damages and punitive damages. In response, Zochem alleged extortion as after-acquired cause for dismissal.

How did the courts analyze the damage awards?

The trial judge awarded Doyle 10 months of pay as a result of the wrongful dismissal. In addition, she was awarded $25,000 in damages for breach of her human rights – the judge found that her gender and her sexual harassment complaint were likely the main reasons for the termination, and that the employer had failed to investigate her complaint properly. Further, she was awarded $60,000 in moral damages for the employer’s bad faith conduct in the manner of dismissal. Specifically, the employer misrepresented to her that her job was not in jeopardy when they had already decided to dismiss her, wrongfully denied her short-term disability benefits and alleged after-acquired cause without any basis.

The employer appealed the trial judge’s decision, and argued that the $25,000 award for the breach of her human rights should be deducted from the $60,000 award of moral damages, as the same conduct was relied upon for both types of damages. The Court of Appeal dismissed the appeal and affirmed the decision, finding that although there was overlap with respect to the conduct justifying each damage award, the conduct was not identical (e.g., an attack on Doyle’s reputation would be a consideration in the award of moral damages, but not for sexual harassment).

More importantly, the court held that the damages for breach of human rights and moral damages serve different purposes – they “vindicate different interests in law.” Specifically, human rights damages are remedial, not punitive, and compensate for the “intrinsic value” of the violation of Code-protected rights: “Such damages are compensation for loss of the right to be free from discrimination and the experience of victimization.” On the other hand, moral damages are awarded for employers’ unfair or bad faith manner of dismissal that causes the employee mental distress. Since these two damage awards “vindicate different interests in law, there will be no overlap in the damages awarded although the same conduct is considered.”

Why is this significant?

This decision is significant as it shows that multiple damage awards may be ordered by relying on the same employer conduct. In addition, the decision emphasizes that employer conduct relied upon for an award of moral damages may be conduct that occurs either before, during or after termination, as long as the conduct is related to the manner of dismissal.

Importantly, this decision comes after the amendments in the Ontario Occupational Health and Safety Act, which have expanded the employer’s obligations with respect to investigating workplace sexual harassment. Employers must engage in best practices to ensure they are complying with their legal obligations, and must take any harassment complaints seriously and properly investigate them.

Employers and HR professionals would be well advised to follow these practice tips in order to prevent and respond to workplace harassment and discrimination:

  • Policies and processes should be written, communicated, enforced and updated as needed.
  • Retain records of harassment and discrimination complaints, investigation processes and reports.
  • Act in a timely manner.
  • Confidentiality should be maintained.
  • Train your employees.
  • Investigate complaints properly before taking disciplinary action.
  • Communicate findings of the investigation with the parties, and outline what steps will be taken to resolve the matter.
  • Ensure a safe work environment free from harassment, discrimination, and reprisals. 

Nadia Zaman is an associate at Rudner Law. This article originally appeared as a blog post on Rudner Law’s website and is republished here with permission.

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