Farris v. Staubach Ontario Inc., 2012 HRTO 1826

HUMAN RIGHTS TRIBUNAL OF ONTARIO

B E T W E E N:

Kathrine Farris Applicant

-and-

Ontario Human Rights Commission Commission

-and-

Staubach Ontario Inc., Harry McKeague, Michel Leonard, David Rose, Jeffrey Wells and Monique Papillon Respondents

RECONSIDERATION DECISION

Adjudicator: Kathleen Martin Date: September 25, 2012 Citation: 2012 HRTO 1826 Indexed as: Farris v. Staubach Ontario Inc.

WRITTEN SUBMISSIONS

Kathrine Farris, Applicant Self-represented

Ontario Human Rights Commission Anthony D. Griffin, Counsel

Staubach Ontario Inc., Harry McKeague, Michel Leonard, David Rose, Jeffrey Wells and Monique Papillon, Respondents Arie Gaertner, Counsel

Introduction

1On May 20, 2011, the Tribunal issued a Decision in this complaint finding that the Ms. Farris had been subjected to a poisoned work environment and discriminated against on the basis of her sex. In addition, the Tribunal found that Mr. McKeague and Mr. Leonard failed to recognize and address this poisoned work environment and terminated the complainant’s employment contrary to the Human Rights Code, R.S.O. 1990, c. H.19 (the “Code”) (2011 HRTO 979). On June 28, 2012, the Divisional Court set aside the Tribunal’s decision not to find Mr. McKeague and Mr. Leonard jointly and severally liable for any portion of the damages awarded against Staubach and remitted the issue to the Tribunal for reconsideration in accordance with its reasons (Ontario Human Rights Commission v. Farris, 2012 ONSC 3876 (Div. Ct.)). This is the Tribunal’s decision on the degree to which these respondents are jointly and severally liable for the $30,000.00 in damages awarded against Staubach.

BACKGROUND

2The complaint filed by Ms. Farris arose out of her employment as a real estate agent with Staubach. Mr. McKeague and Mr. Leonard were the principals and managers of Staubach and the only shareholders of the holding company that owned Staubach. The other named respondents were other agents working at Staubach (Mr. Rose and Mr. Wells) and another manager who ultimately I found did not violate the Code. At the time the complaint was adjudicated, Staubach was described as being as no longer operational.

3On May 20, 2011, the Tribunal issued a Decision in this matter and made the following findings:

i. The complainant was subjected to a poisoned work environment or otherwise discriminated against on the basis of sex and gender by other agents who made comments which disparaged her on the basis of her sex and gender and perpetuated a sexual rumour (paras. 163-165).

ii. The complainant raised concerns about how she was treated by the agents working for Mr. McKeague and Mr. Leonard and, while initially, the concerns were approached in a reasonable manner (brought in a psychologist with experience in workplace conflicts), at a certain point, the limited steps taken were not reasonable and the failure to respond further contributed to the exacerbation of a poisoned work environment starting in 2002 (see paras. 166-187).

iii. The complainant was terminated on June 18, 2003 and the poisoned work environment was a factor in the decision to terminate the complainant’s employment (see paras.188-195).

4In determining that $30,000.00 would be ordered, the Tribunal relied on the above findings and the impact on Ms. Farris (paras. 218 to 228).

5On the issue of liability, Staubach was found liable and ordered to pay $30,000.00 together with pre-judgment and post-judgment interest. None of the individual respondents were found jointly and severally liable. Requests for reconsideration brought by the Commission and complainant were denied (2011 HRTO 1778).

6The Commission and the complainant sought judicial review of the Tribunal’s decisions not to find Mr. McKeague and Mr. Leonard jointly and severally liable for the damages against Staubach. On June 29, 2012, the Divisional Court issued its decision setting aside the Tribunal’s decision on this issue and remitting the issue back to the Tribunal for reconsideration.

7In the course of its reasons, the Court highlighted the importance of two of the fundamental principles of human rights law: first, a finding of corporate liability is not meant to act as a shield against a finding of individual liability where the acts of the individual constitute a violation of the Code; and second, the focus of human rights legislation is to provide an effective remedy to the complainant (one measure of which is the degree to which the damages can be collected).

8In remitting it back to the Tribunal, the Court made the following observations:

This is not a case where only one solution is possible or reasonable. The Tribunal awarded Ms. Farris $30,000.00 for injury to dignity, feelings and self-respect arising out of the discrimination she experienced. This discrimination included not only Mr. McKeague’s and Mr. Leonard’s discriminatory acts, but also those of the other agents who spread the rumour about her and called her disparaging names. It was the culmination of these acts that the Tribunal found created the poisoned work environment that Mr. McKeague and Mr. Leonard failed to address.

Given these findings, it is possible that the Tribunal could reasonably choose to find Mr. McKeague and Mr. Leonard jointly and severally liable for only a portion of the damages that it awarded against Staubach.

9On August 7, 2012, the Tribunal issued a Case Assessment Direction, which among other things, set a schedule for the parties to make written submissions on the issue remitted back to the Tribunal. The Tribunal stated that if the parties believe that oral submissions are necessary, they should include submissions in support of the need for oral submissions in their written submissions.

10All of the parties have filed written submissions.

11The Commission argues that only one conclusion is consistent with the jurisprudence referred to by the Divisional Court; namely, that Messrs. McKeague and Leonard are jointly and severally liable with Staubach for the $30,000.00 awarded to the complainant, together with pre-judgment and post-judgement interest. The Commission relies on the Court’s emphasis on the inoperative status of Staubach and highlights an “additional fact” which is not in dispute: the corporation was dissolved by Certificate of Dissolution dated January 11, 2007. The Commission states that this is not a case in which there is only a “concern” about ability to pay; the corporation is unable to pay.

12The Commission also argues that the award against Staubach made by the Tribunal can only be for the actions and failure to act of Mr. McKeague and Mr. Leonard. In this respect the Commission relies on the Tribunal’s reasons in the decision and the fact that an award against Staubach cannot be compensation for offensive conduct or comments by agents which amounted to harassment because of the complainant’s sex, since a corporate employer cannot be vicariously liable for harassment by its employees. Finally, the Commission relies on the Court’s endorsement of the interpretation of the purpose of section 46.3 of the Code offered in Reyes v. Seepersaud, 2010 HRTO 933, at para. 7:

The purpose of section 46.3 is to confirm the parallel statutory liability of corporations, trade unions, etc., for the actions of their employees, members, etc, not to replace it.

13Ms. Farris supports the Commission’s submissions and includes additional submissions highlighting some of the evidence in the proceeding. The Commission’s summary of the evidence presented in final argument is attached to her submissions.

14The respondents argue that Messrs. McKeague and Leonard should only be ordered to pay a nominal amount of the $30,000.00 award. The respondents argue that while the findings against these respondents were characterized by the Tribunal as “key”, they were not ascribed a more central role than the other respondents. The respondents argue that the principles articulated by the Divisional Court (including the need for an effective remedy and that a finding of corporate liability is not a shield for individual liability) does not mean that, where the actions differ in character and/or degree from those committed by the corporation (or other employees for which the corporation is liable), this should cause the Tribunal to award the same damages against the individuals. The respondents reject the Commission’s interpretation of the Tribunal’s decision that the Tribunal only awarded damages against the corporation for the findings against Mr. McKeague and Mr. Leonard and state that, in any event, such a conclusion is inconsistent with the Commission’s position in the merits hearing and the Divisional Court’s decision. Finally, the respondents suggest that the Tribunal implicitly recognized in not holding these respondents liable for damages that Staubach had already paid $42,000.00 to Ms. Farris and they were exposed to a financial burden in having to respond to significant special damages claims asserted and proved baseless.

15None of the parties sought an oral hearing.

DECISION

16The issue before me is what is the appropriate allocation of damages for which Mr. Leonard and Mr. McKeague should be held jointly and severally liable with Staubach. I find that this issue can be determined based on the evidence already heard, the findings made and the written submissions of the parties.

17In determining this issue, I am mindful of the principles highlighted by the Divisional Court; namely, the need to provide an effective remedy to Ms. Farris and that a finding of corporate liability should not be a shield for individual liability. I am also cognizant that a party can only be liable for their own acts of discrimination absent a legal basis on which to make a party liable for the acts of another. Thus, I find that in determining what Mr. Leonard and Mr. McKeague should be jointly and severally liable for with Staubach, the issue is what acts did they do and what is the appropriate assessment of the amount of damages ordered which is attributable to those acts.

18In the decision, I made three central findings which are summarized in paragraph 3 above. I found the agents were responsible for the creation of a poisoned work environment; and that the role of Mr. Leonard and Mr. McKeague was not recognizing and responding to Ms. Farris’s concerns (which ultimately exacerbated the poisoned work environment) and that the poisoned work environment (which was exacerbated by the failure of Mr. Leonard and Mr. McKeague to appropriately address) was a factor in their decision to terminate her employment. As referenced in paragraph 4 above, all of these findings were relevant to the issue of the amount of compensation awarded. In my original decision, I found that the corporation was liable for all of these acts.

19To the extent the Commission argues that this is not the case and that Staubach could only have been made liable for the actions of the principals of Staubach, I disagree.

20While the Commission correctly states that a corporation cannot be vicariously liable for harassment by its employees, my finding regarding the agents was that Ms. Farris was subjected to a poisoned work environment or otherwise discriminated against on the basis of sex and gender contrary to sections 5, 7(2) and 9 of the Code. Pursuant to s. 46.3 (1) of the Code, a corporation is vicariously liable for “any act or thing done or omitted to be done in the course of his or her employment by …an …employee…” and section 5(1) is not exempted.

21Further, I do not agree that the paragraphs relied on by the Commission in the Decision limit the award made to those actions attributable only to Mr. McKeague and Mr. Leonard. In assessing damages, paragraph 218 references the discrimination commencing in mid-2001 (which is the conduct attributable to the agents). The reference in paragraph 257 (which deals with the award of interest running from the mid-point between November 30, 2001 and June 18, 2003) does not limit the findings to the former date but instead reflects a date proposed by the Commission and accepted by the Tribunal as an appropriate date on which the impact on Ms. Farris was measurable given her attendance at hospital at that time. I note that at the time the Commission made this submission in final argument, it had advocated that all of the personal respondents be liable including the agents. In a similar vein, the reference in paragraph 262 does not limit the award of $30,000.00 to only certain findings in the Decision but is, as expressly stated, an “observation” about the role of the conduct of the corporation (through its managers, Mr. McKeague and Mr. Leonard) and why a remedy for future compliance is not appropriate given their current status and other considerations. In paragraph 260, I made a similar observation about training of staff which obviously related to the discriminatory conduct of the agents for which I found the corporation liable.

22I now turn to assessing liability for the acts of Mr. Leonard and McKeague – their role in the termination and their role as managers in failing to take appropriate steps to respond to Ms. Farris’s concerns – which I previously characterized as “key” in the original Decision. Given my findings and this characterization, nominal damages as suggested by the respondents are not appropriate.

23In my view, of the $30,000.00 ordered, an appropriate allocation for the termination is $15,000.00. This reflects the objective seriousness of Ms. Farris losing a job that she held for a number of years coupled with the subjective evidence of impact which I accepted and which is summarized in para. 224 of the Decision.

24In assessing the respective role that each manager played, I have considered whether it is appropriate to distinguish between the two managers/owners in respect of the termination but have decided not to. While Mr. McKeague carried out the decision to terminate Ms. Farris, it was a decision that had been made jointly by them, based upon the evidence I heard at the hearing. Having regard to all of the circumstances, including the absence of any submissions by any of the parties suggesting that a distinction should be drawn between these two individuals, I find Mr. McKeague and Mr. Leonard jointly and severally liable with Staubach for $15,000.00 for the termination.

25Of the remaining $15,000.00 of the original award, I find it appropriate to allocate this amount evenly: $7,500.00 for the discrimination found attributable to the role of the agents in creating a poisoned work environment (for which I found the corporation liable); and $7,500.00 for the role of Mr. McKeague and Mr. Leonard in not addressing it and thereby exacerbating the environment (for which I now find these respondents jointly and severally liable with the corporation in accordance with the Divisional Court’s decision). Again, I do not draw a distinction between Mr. Leonard and Mr. McKeague, who were the owners and managers of the corporation. While Mr. Leonard was principally in charge of the Montreal office, he participated in most of the key meetings that were held at which time Ms. Farris raised her concerns and which I ultimately found failed to address her concerns. In light of this and the absence of any submissions to the effect that their roles should be differently assessed, I find Mr. Leonard and Mr. McKeague jointly and severally liable with Staubach for $7,500.00 of the $15,000.00 for creating a poisoned work environment.

26I have considered the respondents’ argument that Ms. Farris already received $42,000.00 but I agree with the Commission that this severance payment is irrelevant to the issue I have decided, which is the appropriate allocation of the injury to Ms. Farris’ dignity, feelings and self-respect.

27Given my reconsideration of liability, my original order of pre-judgment and post-judgment interest should be reconsidered as well to make Mr. McKeague and Mr. Leonard liable for interest, which I do below. Having regard to the circumstances and in the absence of any submissions that the liable parties be treated differently from each other, I have retained the same dates for calculating interest as set out in the original order.

28In the result, I amend the Tribunal’s original order set out in paragraph 265 of the Decision to the following:

i. Staubach Ontario Inc., Harry McKeague and Michel Leonard are jointly and severally liable to pay the complainant $22,500.00 as compensation for injury to dignity, feelings and self-respect together with pre-judgment and post-judgment interest on this amount as set out below; and

ii. Staubach Ontario Inc. shall pay the complainant a further $7,500.00 as compensation for injury to dignity, feelings and self-respect together with pre-judgment and post-judgment interest on this amount as set out below;

iii. Pre-judgment interest shall be paid on the amounts owing from September 9, 2002, to May 20, 2011, in accordance with the Courts of Justice Act, R.S.O. 1990, c. C.43, and post-judgment interest on any amount not paid within 30 days of May 20, 2011, in accordance with the CJA.