Thursday, November 22, 2012

No Punitive Damages for "cruel" Treatment of Employees

The Court recently released its reasons in Evans v. Complex, involving the dismissal of an 8.5 year employee with a critical IT role.  While the case was muddied by a claim for bad faith damages, most of the case was a simple question of how long the notice period should be, and the scale of damages within the notice period.

The plaintiff's base salary was $50,400 per year, but she also received modest bonuses, health care benefits, and consistently worked significant overtime.  The trial judge annualized her compensation package as being worth $70,680.32 per year, and she was awarded pay in lieu of 9 months' notice on that basis.

The bad faith claim was rooted in a mistake rather similar to the email "oops" moment I described recently in another case:  She called the manager of operations to get authorization to work overtime, and he had another manager in the office, whom he told about the plaintiff's request, and added (audibly to the plaintiff, through presumably not intentionally so), "don't spend too much time on this, Wendy's getting canned tomorrow anyways."

Even worse, when she confronted them about that comment, they misled her, telling her that it was not true.  She worked another 9 hours overtime, under the impression that her job was still secure, and then, indeed, got "canned" the next day.

The trial judge described the comment as "unprofessional, callous and careless", and referred to the employer's treatment of her overall as "at minimum unfair and cruel".

However, the trial judge found that moral damages couldn't be awarded because there was no evidence of compensable injury, and the employer's misconduct didn't rise to the level of misconduct described in the Gismondi and Pate cases, so no bad faith damages could be awarded at all.

My Thoughts

I would be interested to know if punitive damages specifically were pleaded.

The trial judge's analysis is completely consistent with the bulk of the case law following Honda v. Keays, if we're just talking about aggravated damages.  In which case the reference to the Court of Appeal's decision in Pate is out of place, because the Court expressly disclaimed any endorsement of the trial judge's award of Wallace-type bad faith damages, which is what Honda essentially did away with.  Either way, the reference to Gismondi makes no sense, because Gismondi was talking about Wallace-type damages.  Following Honda, cases like Gismondi mean relatively little.

However, Pate dealt in large part with punitive damages - a scenario where the employer's conduct was "egregious" and "reprehensible".  Punitive damages were awarded in that case, and the Court of Appeal concluded that the trial judge erred by restricting himself unduly to a $25,000 award of punitive damages.  Ultimately, Mr. Pate's punitive damage award was increased to $550,000.

There's no question that the facts in Pate were more severe than the facts in Evans v. Complex.  However, with a $550,000 punitive damage award, Pate is obviously not the low watermark for employer conduct worthy of punishment.  Reasonable people might disagree as to whether or not Complex's conduct out to be penalized with punitive damages, and the bulk of the case law would probably incline me towards "not", but given the adjectives the trial judge did use to describe their conduct - "unprofessional", "callous", "careless", "unfair", and "cruel" - it's hard to justify not awarding punitive damages; otherwise, the message the Court sends is that it feels no compulsion to denounce employers treating their employees cruelly.


This blog is not intended to and does not provide legal advice to any person in respect of any particular legal issue, and does not create a solicitor-client relationship with any readers, but rather provides general legal information. If you have a legal issue or possible legal issue, contact a lawyer.

No comments:

Post a Comment