Rehiring Sexual Harasser Constructively Dismisses Victim

An Ontario employer constructively dismissed a worker when it rehired a former manager who had sexually harassed the worker years earlier, but it didn’t intentionally cause the worker’s PTSD and depression that stemmed from the hiring decision, according to Ontario courts.

The worker was an employee of Tbaytel, a telecommunications company operating in Thunder Bay, Ont., that is owned by the municipality. She was hired in the late 1980s when the company was called the Thunder Bay Telephone Company and its workers were direct employees of the city.

In the 1990s, while the employer was still the City of Thunder Bay, the worker’s supervisor sexually harassed her and other employees in the city’s telephone department. The city investigated the allegations against the supervisor, but didn’t interview him directly. It ultimately decided to terminate the supervisor’s employment in 1996 because of the complaints but didn’t use them as an official reason, instead providing severance for a without-cause termination.

The worker continued to work in her position through the transition of Tbaytel assuming the responsibility for Thunder Bay’s telecommunication services — eventually becoming the executive assistant to the executive vice-president of operations — without event until late January 2007. That was when Tbaytel made an announcement that shocked and upset the worker.

On Jan. 29, Tbaytel announced that it had hired a new vice-president of business consumer markets. That new vice-president was the worker’s former supervisor — the one who had been fired 11 years earlier because of sexual harassment allegations from her and others — and his new position would mean she would encounter him frequently. The worker immediately told her boss she wasn’t feeling well and went home.

Employer informed of new hire’s history

Later that day, the worker and her husband met with her boss and Tbaytel’s vice-president of human resources to tell them the new hire had been terminated by the city in 1996 for sexually harassing her and other employees. Three days later, she emailed her boss to say she was “not eating or sleeping, was vomiting and on the verge of a nervous breakdown.” She later provided a doctor’s note advising she would be off work due to stress until March 1.

The effective date of the new hire wasn’t until Feb. 19 and his employment was subject to a probationary term, but Tbaytel decided to go ahead with it. Tbaytel’s president and CEO wrote to the worker that he took her “accusations of 11-odd years ago seriously and will discuss appropriate behaviour” with the new hire, but would proceed. Tbaytel offered to accommodate the worker by transferring her to an equivalent position in an adjacent building, but the worker refused. She insisted Tbaytel should not hire the man.

The worker was diagnosed with post-traumatic stress disorder (PTSD) and didn’t return to work. She sued Tbaytel and the city for the tort of intentional infliction of mental suffering as well as wrongful dismissal.

The trial court dismissed the claim for intentional infliction of mental suffering, finding two of three elements of the tort were met — Tbaytel’s decision to proceed with hiring the new VP after learning of his history was “flagrant and outrageous conduct” and it resulted in a “visible and provable illness  — PTSD and depression.

However, the trial court found Tbaytel’s conduct didn’t meet the third necessary element for the tort — that it was calculated to produce harm. While Tbaytel knew the worker was upset, unable to work, and experiencing significant symptoms, the court didn’t think there was enough evidence to prove Tbaytel knew its conduct would cause the worker’s PTSD and depression.

No intentional infliction of suffering, but constructive dismissal

Despite finding no intention on Tbaytel’s part to inflict mental suffering, the trial court did find Tbaytel constructively dismissed the worker. Tbaytel and the city were jointly ordered to pay the worker damages equal to 12 months’ notice, less what the worker had already received through short-term salary continuance and long-term disability benefits. In addition to the notice award, the two employers were also ordered to pay the worker $100,000 in damages for bad-faith conduct in the manner of dismissal. However, because the worker’s claim for a large amount of damages for intentional infliction of mental suffering was unsuccessful, she was found liable for the employers’ legal costs — $200,000.

The worker appealed the dismissal of her claim for intentional infliction of mental suffering and the costs award against her, arguing the trial court erred in requiring that Tbaytel should know the exact kind of harm its conduct would cause when it ought to have known and did know it was causing harm to her.

Tbaytel and the city cross-appealed the finding of constructive dismissal.

The Ontario Court of Appeal agreed that the trial court erred in requiring that Tbaytel know the exact kind of harm its conduct would cause, but still upheld the finding that element of the intentional mental suffering test wasn’t met. It noted that intention to cause harm is different from negligence and there is a high bar to prove it. The appeal court found the evidence didn’t support that the employer’s intention was to cause harm.

The appeal court found Tbaytel tried to accommodate the worker by transferring her — “ostensibly for the purpose of avoiding the imposition of mental suffering upon her.” The court noted that while this accommodation offer wasn’t acceptable to the worker, it could have been acceptable to someone else in her position. While some sort of psychological injury may have been foreseeable, it wasn’t enough to prove an intentional tort that Tbaytel knew the worker’s PTSD and depression “was substantially certain to occur,” said the court.

The appeal court also rejected the cross-appeal by Tbaytel and the city, finding the trial court’s determination of constructive dismissal was reasonable. Tbaytel knew the new hire had sexually harassed the worker and had been fired because of it and the worker was shocked and upset by the rehiring, but Tbaytel went forward with it. The appeal court agreed with the trial court that “a reasonable person would see the (worker’s) continued employment as intolerable under such circumstances.”

Given it upheld the trial court’s dismissal of the worker’s claim for damages for intentional infliction of mental suffering, the Court of Appeal also upheld the costs award against the worker. Tbaytel and the city remained liable for $114,000 in damages for constructively dismissing the worker, while the worker remained on the hook for $200,000 in legal costs for the employers.

Originally Posted on HR Reporter by Jeffrey Smith on June 11, 2019