by Michael V. Coyle, JD*
In an unusual case, a British Columbia jury recently awarded a fired employee total compensation of $809,000, approximately $573,000 of which was awarded as punitive damages against the employer after a three week trial.
Larry Higginson worked at a saw mill as an electrician for 34 years. In later years he was manager of the electrical department. The mill was “sold” to a related company. The “new” owner proposed an employment contract in which the employees would basically lose the severance rights they had earned. Mr. Higginson refused to go along. As a result, the employer started excluding him from meetings and started putting unfair pressure on him.
Then he was then fired without notice, allegedly “for cause”. He said that the employer concocted the grounds for dismissal so they wouldn’t have to pay him the severance he was legally entitled to as a long-term employee. He also said that the parent company was directing this particular strategy against long-service employees to lessen its financial exposure. The testimony at trial of other mill workers who had been fired and were now able to come forward confirmed the employer’s strategy of getting rid of long-service employees by firing them on trumped-up grounds. On that basis, Mr. Higginson sought damages in tort for the wrongful interference with contract against the parent company. That was in addition to the wrongful dismissal claim. That opened the door to a claim for punitive damages.
Essentially, Mr. Higginson argued that he was the victim of a nasty conspiracy. The jury obviously agreed. They handed him the largest punitive damage award in a wrongful dismissal case in Canadian history.
Fortunately for Mr. Higginson, he started to secretly record conversations at work when he feared that the employer might start to make things up about him. The tapes were used during litigation to substantiate his claims that the employer had done exactly that. Interestingly, the employer argued in court that his secret recordings were further evidence of his disloyalty and dishonesty and proved that the dismissal was justified. That unusual submission seems to have backfired on the employer.
Because this was a jury award we do not, of course, have the benefit of the judge’s reasons. Normally, we might expect that the employer would appeal from the jury award and that this would have resulted in a written decision from the appeal court no matter how the appellate court decided the appeal. However, it seems that the parties reached a confidential post-trial settlement to avoid an appeal. One can assume that involved an actual payment that was somewhat less than the $809,000 awarded by the jury, but not so much less that Mr. Higginson would have the incentive to defend the jury award in the court of appeal.
For its part, the employer likely decided to cut its losses in a case that should never have gone to court.
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*Michael Coyle is an experienced labour and employment lawyer based in Kentville, Nova Scotia. He is recognized by the Government of Canada as a neutral arbitrator, mediator and adjudicator. Information in this article is meant for general interest only and is not a substitute for legal advice about your own situation. Michael can be reached by email at [email protected] For more information and FAQs on private dispute resolution please look under the Private Dispute Resolution tab on the left.
©Michael V. Coyle, 2012