Wrongful Dismissal Case Garners Record Punitive Damages Award

April 1st, 2013 by Meliha Waddell

The plaintiff, Larry Higginson, was employed as an electrician for 34 years by a sawmill, in the B.C. mill town of Burns Lake. In later years, Mr. Higginson served as a manager in the electrical department.

In or about October 2006, the sawmill was sold to a new American owner, Hampton Lumber Mills (“Hampton”). Mr. Higginson was dismissed for cause three years later in October 2009.

In Higginson v. Babine Forest Products Ltd., 2010 BCSC 614 CanLii, Mr. Higginson’s alleged causes of action ofwere wrongful dismissal and inducing breach of Mr. Higginson’s contract of employment. According to Mr. Higginsonhim, he was terminated in an attempt to avoid paying severance to long-serving employees, a practice, Mr. Higginson submitted, that was part of a full-scale institutional scheme. Moreover, the new American owner created a hostile and miserable working environment for Mr. Higginson in the hope that he would quit. Hampton argued that it had just cause for the dismissal.

In deciding that there was no cause to terminate Mr. Higginson, the jury awarded him $236,000 in compensatory damages for wrongful dismissal and $573,000 in punitive damages for the company’s conduct in terminating him.

The historic jury award lends itself to a discussion of several legal and business issues.

Whether the punishment fits the crime is arguable. Indeed, if Hampton’s actions were isolated to Mr. Higginson rather than systemic as against all long-serving employees, the quantum of punitive damages, if any, would at least be called into question. Which begs the question, how much of Mr. Higginson’s reward should be based on Hampton’s actions as against other employees?

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It will also be interesting to see whether this jury award paves the way for new legislation. At a minimum, continuity of employment provisions under the Employment Standards Acts (“ESAs”) across the country should be revisited to ensure that ESAs are adequately protecting employees during the process of a business being sold. On the other hand, the foregoing continuity of employment provisions should not be unduly restrictive on buyers, as that may have the unintended consequence of disincentivizing purchases of existing businesses and harm buyers, sellers and employees alike.

This jury award will likely have more far-reaching implications in small and single industry/employer communities because the circumstances of displaced workers in those communities tend to be bleaker. At this stage, however, it is not clear whether the jury award will have any traction in major metropolitan areas, where there tends to be greater employee mobility and industrial diversity.

The jury award will invariably force employers and their lawyers to take notice, which may in turn, facilitate more out-of-court settlements in efforts to avoid litigation.

What is clear from this jury award is that employer misconduct will not be tolerated, nor should it be. It is beyond the scope of this article to recite the innumerable types of employer misconduct, instead, I will borrow and rely on U.S. Supreme Court Justice Potter Stewart’s famous characterization of pornography in his concurring opinion in Jacobellis v. Ohio, 378 U.S. 184 (1964), a First Amendment case dealing with obscenity and constitutionally protected speech, where he stated: “I know it when I see it”. Justice Potter Stewart’s characterization of pornography rings true for employer misconduct, which was obviously present in the instant case (Subsequent to the jury award, Hampton filed an appeal and the parties settled the case out-of-court for an undisclosed amount. As such, the appeal was withdrawn).


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