Abusive boss? Thought about suing?

Elliot Special Risks LP has released an article in their newsletter for Autumn 2010. Anyone who has had a "mean" boss will relate to this situation.

The Ontario Court of Appeal has recently overturned a lower-court award of more than $500,000 to a woman for abuse she suffered at the hands of her former boss. In 2005, Marta Piresferreira, then in her early 60s, had worked for Bell Mobility for about 10 years. She had received mostly glowing performance reviews, but responded poorly to Richard Ayotte's management style. According to everyone in the department, Ayotte repeatedly found fault with his staff, intimidating them by yelling and swearing at them.

In May 2005, he berated Piresferreira for failing to arrange a meeting with one of her clients. She tried to explain and attempted to show him a relevant e-mail on her Blackberry, but he shoved her in the shoulder, threatened her with a performance improvement plan (PIP), and told her to get out of his office.

Piresferreira returned to her desk in tears, then left. After a week-long scheduled holiday, she returned and met with Ayotte on the understanding that he would apologize. Instead, he presented her with the PIP, which she refused to sign. She contacted the human resources department and lodged a formal complaint against Ayotte for his assault and abusive conduct. Bell took little action against him and proceeded with the PIP, steps that amounted to wrongful dismissal in Piresferreira's opinion.

Piresferreira went on sick leave and eventually long-term disability, having been diagnosed with major depression, anxiety and post-traumatic stress disorder. She sued Ayotte and Bell in August 2005, claiming damages for assault and battery, negligent and intentional infliction of emotional distress, past and future loss of income, and wrongful dismissal.

In 2008, Ontario Superior Court Justice Catherine Aitken awarded Piresferreira $45,000 for assault, battery, intentional and negligent infliction of emotional distress, mental suffering and psycho-traumatic disability; $450,832 for loss of past and future income; and $5,123 in special damages.

In May 2010, the Court of Appeal for Ontario overturned the lower court ruling and awarded damages totaling $147,855: $15,000 for the battery, plus damages for breach of her employment contract of $87,855 in lost wages (based on a 12-month notice period), as well as $45,000 for the mental suffering she experienced because of the manner in which she was constructively dismissed.

The appeal court firmly closed the door on recognition at common law of a freestanding tort cause of action against employers for negligent infliction of mental suffering in the workplace.

According to Justices Russell Juriansz, Eleanore Cronk and Susan Lang, recognizing such a far-reaching duty would require courts to venture deeply into workplace operations and "require employers to take care to shield employees from the acts of other employees that might cause mental suffering" - not only at the time the employee is terminated, but throughout the employee's entire period of employment.

Justice Juriansz said that such a new cause of action is "unnecessary because if the employees are sufficiently aggrieved, they can claim constructive dismissal."

However, Piresferreira's lawyer, John Yach, said he will seek leave to appeal the decision to the Supreme Court, arguing that recognizing a cause of action for negligent infliction of mental suffering in the workplace accords with public policy. He pointed to recent amendments to Ontario's Occupational Health and Safety Act (Bill 168), which require employers to create and appropriately administer anti-harassment and anti-violence policies.

The Court of Appeal for Ontario decision can be found here.