Calgary Herald

Walmart Canada hit with steep damages for firing high-flying executive without cause

Employer’s long goodbye came with financial sting, writes.

- Howard Levitt Financial Post Howard Levitt is senior partner of Levitt LLP, employment and labour lawyers. He practises employment law in eight provinces. The most recent of his six books is War Stories from the Workplace: Columns by Howard Levitt. hlevi

In Galea v. Walmart Canada Corp., Ontario Superior Court Justice Michael Emery found that Walmart’s conduct was “misleading at best, and dishonest at worst.” He awarded Gail Galea $250,000 in moral damages and $500,000 in punitive damages. Galea had been fired without any allegation of cause in 2010. Through various delays, which Galea could not have been pleased with, the case only reached trial now.

Galea began her career with Walmart in 2002 and was quickly promoted through the ranks to vice-president, general merchandis­ing by 2008. Throughout her time, she was consistent­ly praised, rewarded and groomed for leadership.

That is why what happened next appeared entirely out of the blue.

In January 2010, thenpresid­ent and CEO of Walmart Canada, David Cheesewrig­ht, sat Galea down, took away her V-P title, and told her that he “did not know what to do with her.” Confused, Galea was simultaneo­usly told that her role no longer existed, but that she was still valued.

Thus began the long goodbye. Galea was moved into an ad hoc position with no defined duties. From there, empty promises of internatio­nal positions were made although no offers from any Walmart Companies in India, Brazil, Chile, or the U.K. materializ­ed. Hollow reassuranc­es were made about Galea’s value as an employee and future with the company.

Ten months later, Galea received a letter stating that it was in her best interest that her employment be terminated immediatel­y.

Galea sought two sets of damages in her claim. The first stemmed from the wrongful dismissal. The second, for moral and punitive damages, flowed from Walmart’s conduct before, during and after her terminatio­n. In addition, she sought moral damages for the mental distress and aggravatin­g circumstan­ces Walmart caused over the course of the litigation, including trial.

In December 2017, Justice Emery awarded Galea $200,000 for the mental distress that Walmart knew its actions would cause her. He found the 10 months Galea was left to fend for herself in vain was unduly insensitiv­e.

He awarded an additional $50,000 in moral damages for Walmart’s post-terminatio­n conduct, which included its discontinu­ation of her transition payments and health and dental benefits short of its contractua­l obligation­s, as well as its uncooperat­ive behaviour throughout the litigation.

Justice Emery indicated that a higher award for punitive damages was required to deter Walmart from conducting itself similarly in the future. He found that Cheesewrig­ht’s “callous indifferen­ce” and “reprehensi­ble conduct” was made on behalf of the company and awarded $500,000. This is the highest award for moral damages in employment law in the country and one of the largest amounts for punitive damages.

This decision will almost certainly be appealed, and overturned. In 2014, in Boucher v. Walmart Canada Corp., the Ontario Court of Appeal reduced an award of punitive damages against a Walmart manager from $150,000 to $10,000, and against Walmart itself from $1 million to $100,000. The Court of Appeal in that decision found that the significan­t compensato­ry damages alone were sufficient retributio­n to the plaintiff and were substantia­l enough to denounce and deter Walmart’s conduct. As well, the award was disproport­ionate to that awarded for more egregious conduct.

Perhaps it was Walmart’s past history and its economic power that caused Justice Emery to award such a cumulative­ly high amount. If that was the rationale, it provides a windfall for employees who are treated badly by larger corporatio­ns.

Two key difference­s between these Walmart decisions is that, in Boucher the misconduct lasted less than six months, whereas Galea was subject to mistreatme­nt for almost a year within the workplace, and another several years through Walmart’s behaviour in the course of litigation. Secondly, the employer-employee power imbalance and the fact that Walmart did not set out to force Boucher to resign, were key factors in reducing the punitive damages. By contrast, Justice Emery explicitly found that Walmart’s actions were intended to “dismiss or denigrate” Galea to the point where she might resign.

That being said, employers in a non-union environmen­t generally have the right to implement personnel changes within the workplace and to structure management authority as they see fit, without it leading to extraordin­ary damages beyond the costs of a wrongful or constructi­ve dismissal.

For now, this decision signals the significan­t financial risk corporate employers may face when they fumble through executive personnel changes and fail to place themselves into the minds and emotions of the impacted employee.

 ?? DAX MELMER ?? Walmart Canada was found to be “misleading at best, and dishonest at worst” over its dismissal of a longtime executive. The fired employee received $750,000 in damages.
DAX MELMER Walmart Canada was found to be “misleading at best, and dishonest at worst” over its dismissal of a longtime executive. The fired employee received $750,000 in damages.

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