A Tale About Rehiring a Sexual Harasser: Who Wins and Loses?

Today’s “#MeToo” climate and questions about when someone who has been accused of sexual misconduct, although not convicted of it, should be allowed back into the public sphere (to direct films, do comedy routines, assume an executive role in business or whatever) has been much in the media recently. Although not explicitly, a recent decision of the Ontario Court of Appeal tells us that even if the impact of someone’s return might have significant impact on a victim’s working — and broader — life, return may occur. The final result in Colistro v. Tbaytel 2019 ONCA 197 is not unlike those situations when the harasser remained in the workplace and the woman harassed was moved elsewhere or left the workplace, albeit with a partial legal victory.

The Court of Appeal’s decision in Colistro begins as follows:

This appeal considers the consequences that flow from a company’s decision to place its business interests above the expectations and concerns of a valued, long-time employee by rehiring an executive dismissed in part due to allegations of harassment of that same employee and others a decade earlier.

The consequences, as it turns out, are that the executive remains at the company and the “valued, long-time employee” faces $200,000 in costs, having received a total of $114,082 in damages (after deductions), although she clearly also attracted the sympathy of both the trial judge and the court of appeal, while the employer is shown to be unfeeling and (one might infer) a poor decision-maker in its hiring practices.

Linda Colistro worked in the telecommunications department of the Corporation of the City of Thunder Bay and its successor, Tbaytel (a Municipal Services Board), for nearly twenty years when the events, leading to this case occurred, having started as a summer student in 1988 and becoming a full-time employee in 1990. In 1995, she complained that her supervisor, Steve Benoit, was sexually harassing her. She does not appear to have been the only employee making similar complaints. In 1996, Mr. Benoit was terminated without cause, although, as the trial judge found, the sexual harassment complaints and concerns about financial wrongdoing lurked in the background (Colistro v. Tbaytel, 2017 ONSC 2731 (CanLII), para. 50) and that Benoit had been aware that there were concerns about sexual harassment [SCJ, para. 253]. Because Mr. Benoit had been terminated, Ms Colistro did not pursue her complaints any further.

In early 2007, Tbaybel hired a new Vice-President of Business Consumer Markets, none other than Steve Benoit, who had been urged to apply by Christine Seeley, Tbaytel’s Vice-President of Human Resources who had joined the City of Thunder Bay in 2003 (Tbaybel was created in 2005). When the president of Tbaytel, Peter Diedrich (who had been hired in 2006), interviewed Mr. Benoit in January 2007, the latter told him that he had been dismissed previously without cause, but the president “did not ask him to elaborate” [SCJ, para. 68]. On January 12th, he hired Mr. Benoit with the condition of 12 months probation, despite the caution expressed by Sharon Hacio who “told Mr. Diedrich and Ms. Seeley that Mr. Benoit had been terminated for sexual harassment and that it would be a ‘bad move’ for Tbaytel to hire him”. (Ms Hacio had worked for the City for 42 years and had been the General Manager from 1986 until retirement in 2002. She was familiar with Ms Calistro’s original complaint and the circumstances of Mr. Benoit’s termination.) Mr. Benoit was to begin on February 19th. It became clear that Ms Calistro had strong objections to this decision and subsequently the president learned the reasons why Mr. Benoit had been terminated in 1995. (According to Mr. Benoit, the president, Mr. Diedrich, had told him “that what was done to him in 1996 was ‘“a fucking travesty”’ (SCJ, para. 80].)

In a letter on February 6th to Ms Calistro, the president advised her, “I have come to the decision that there is no legal or other reason not to go forward with hiring Mr. Benoit…You may find that you are unable to accept my decision and, in that case, you will have to proceed as you see fit.” [SCJ, para. 316] He knew by then that Ms Calistro had been off work and had been diagnosed with stress. The president advised that he would talk to Mr. Benoit about appropriate behaviour and Tbaytel proposed two ways of accommodating Ms Calistro, but could not guarantee that she would not come into contact with Mr. Benoit; Ms Calistro considered one of the two accommodations as a demotion[SCJ, paras. 23 and 24]. She would not accept any accommodation other than Tbaytel’s not hiring Mr. Benoit. She never returned to Tbaytel and was diagnosed with PTSD and depression.

Ms Colistro brought an action against Tbaytel and the City of Thunder Bay in June 2008, seeking damages for intentional infliction of mental suffering and wrongful dismissal; she claimed damages for constructive dismissal of $100,000, “Honda” damages of $250,000 and damages for intentional infliction of mental distress in a total of some $3,000,000 [SCJ, paras. 1-3]). The trial judge dismissed the mental damages claim but held that Ms Colistro had been constructively dismissed for which he awarded her damages; he ordered her to pay costs to Tbaytel and the City of Thunder Bay. Although holding that the trial judge erred in one respect (that did not change the result), the Court of Appeal upheld the judge’s decision.

At trial, Fregeau J. described in some detail the events following Ms Colistro’s not returning to work, with meetings involving her and, at her insistence, her husband and various persons from Tbaytel. He also set out detailed evidence from Ms Colistro’s medical doctors, including her own doctor, as well as psychiatrists, one of whom reported that complete recovery was unlikely until the legal case was resolved, of her PTSD and depression. Ms Colistro’s husband described his wife prior to 2007 “as a strong, punctual, organized mother and homemaker who loved her job and family … happy to go to work and happy when she got home. In the evenings and on weekends, she did all the cooking and housework and attended to the children’s activities.” Afterwards, however, she “no longer did the cooking or housework and withdrew from social activities…[H]er smoking increased ‘drastically’ and … she developed a drinking problem.” [SCJ, paras. 48 and 49]

With respect to the claim for intentional infliction of mental distress, the trial judge considered the three elements that Ms Calistro was required to establish: flagrant or outrageous conduct; calculated to produce harm; and resulting in a visible and provable illness [SCJ, para. 231]. For conduct to be calculated to produce harm, relying on Prinzo v. Baycrest Centre for Geriatric Care, 2002 CanLII 45005 (ON CA) and Piresferreira v. Ayotte 2010 ONCA 384 (CanLII), he stated that it is not sufficient that the harm was foreseeable or the entity alleged to have caused the harm was reckless as to the consequences; rather, it must have wanted to cause it or that the harm is “‘known to be substantially certain to follow'”.

However, it is sufficient that the kind of harm met the requirements, not the extent of it. [SCJ, paras. 232-234] He recognized that sexual harassment could ground damages for intentional infliction of mental distress, but citing Perell J.A. in High Parklane Consulting Inc. v. Royal Group Technologies Limited, (2007) CanLII 410 (ONSC), appeared to accept that “the elements of the tort of intentional infliction of mental distress that the conduct must be extreme, flagrant, outrageous and calculated to caused harm are the law’s ways of narrowing the ambit of the tort” [SCJ, paras. 235-236].

Justice Fregeau held that “Tbaytel’s conduct in deciding to proceed with hiring Mr. Benoit was, objectively viewed and in all the circumstances, flagrant and outrageous conduct” [SCJ, para. 280]. In the face of the evidence, it was clear that the president wanted to hire Benoit “while at the same time hoping to put Ms. Colistro’s concerns to rest by shuffling her to another building. This decision minimized and invalidated the sexual harassment complaints of Ms. Colistro, a 20 year valued and respected current employee of the company”. He concluded, “Tbaytel’s conduct in this regard exceeds insensitivity or poor management. In my opinion, a reasonable person aware of all the facts would find the conduct of Tbaytel to be flagrant and outrageous.” [SCJ, paras. 283-284]

Still, even though Tbaytel knew the harm hiring Mr. Benoit was causing Ms Colistro, it did not intend to cause the harm and did not know that it was substantially certain that their conduct would precipitate the plaintiff’s PTSD and depression”. Justice Fregeau dismissed the claim for intentional infliction of mental distress. In the event he was wrong, he calculated damages as $100,000 for general damages, as well as compensatory damages. He refused to award aggravated or punitive damages, which are awarded for conduct that exceeds normally accepted standards and recognizes the high-handed or flagrant nature of the conduct: “The impugned conduct of Tbaytel, which I have found to be flagrant and outrageous, did not, in my opinion, rise to the level of malicious and oppressive conduct, so as to require an award of punitive damages in addition to the compensatory damages awarded.” [SCJ, para. 309]

Constructive dismissal occurs when an employer acts in such a way as to show that it no longer intends to be bound by the contract, for example, by making the employee’s continued employment intolerable; there does not have to be breach of a particular provision of the contract [SCJ, paras. 241-245]

Constructive dismissal can attract Honda damages), that is, actual damages and not merely the extension of the notice period, “if the employer engages in conduct during the course of dismissal that is ‘unfair or is in bad faith by being, for example, untruthful, misleading or unduly insensitive’” [SCJ, paras. 249-250, citing Honda Canada Inc. v. Keays, 2008 SCC 39 (CanLII)]. It can occur when the employer breaches an explicit or implicit term of the contract or when the employer’s behaviour cumulatively indicates that it no longer intends to be held to the contract or, put another way, the employer’s cumulatively conduct makes the employee’s continued employment intolerable: Potter v. New Brunswick Legal Aid Services, 2015 SCC 10. This second form applies in Colistro. In the context of a poisoned workplace, the Fregeau J. cited General Motors of Canada Limited v. Johnson, 2013 ONCA 502:

A plaintiff’s subjective or genuinely-held beliefs are insufficient to discharge the onus. There must be evidence that, to the objective reasonable bystander, would support the conclusion that a poisoned workplace environment had been created. [citations omitted]… Moreover, except for particularly egregious, stand-alone incidents a poisoned workplace is not created, as a matter of law, unless serious wrongful behaviour sufficient to create a hostile or intolerable work environment is persistent or repeated [citation omitted]. [General Motors, paras. 66 and 67]

Justice Fregeau found that Ms Colistro had been constructively dismissed. He held that “Tbaytel had been [Ms Calistro’s] employer for approximately 20 years. Their position on the issue re-victimized the plaintiff and minimized the past conduct of Mr. Benoit in the eyes of the plaintiff and other Tbaytel employees.” Furthermore, Tbaytel’s position “was demeaning and dismissive”; for example, the president wrote to Ms Colistro that he saw no reason not to hire Mr. Benoit and that if she could not agree with that, “you will have to proceed as you see fit” [SCJ, paras. 315-316]. The trial judge continued,

The issues raised by Ms. Colistro were not ;accusations,’ as suggested by Mr. Diedrich. Tbaytel chose to proceed with the hiring of an individual whom they knew had previously sexually harassed one of their apparently valuable employees, who had an unblemished 20 year history with the company and who was objecting “vehemently” to her abuser being hired. I find this to have been a blatant disregard for the interests of Ms. Colistro. [SCJ, para. 316]

Under these circumstances, Ms Colistro’s continued employment was intolerable and therefore he held that she had been constructively dismissed. The judge determined that 12 months notice was appropriate, amounting, with relevant deductions to $14,082, plus Honda damages of $100,000, saying

. In the tort claim, I found that Tbaytel’s conduct toward Ms. Colistro was flagrant and outrageous. I also find Tbaytel’s treatment of Ms. Colistro was grossly unfair, unduly insensitive and in blatant disregard of her interests. The Court has the benefit of extensive expert medical evidence which establishes that Ms. Colistro has suffered actual damages as a direct result of the way in which she was treated by Tbaytel at the time of her dismissal. [SCJ, para. 325]

Ms Colistro appealed on the intentional infliction of mental distress claim, damages and costs. Tbaytel and the City cross-appealed on constructive dismissal, the Honda damages and on the first element of the tort. The Court of Appeal dismissed both Ms Colistro’s appeal and Tbaytel and the City’s cross-appeal [CA, para. 13].

The Court of Appeal found that the trial judge erred in relation to the harm element of intentional infliction of mental distress because he “required Tbaytel to have known of the exact kind of harm that resulted, down to the particular psychiatric illness that was subsequently diagnosed” (emphasis in the original). Instead, “[a] finding that Tbaytel knew that its February 6, 2007 letter was substantially certain to cause the appellant serious psychological injury would have sufficed to satisfy the second element”. [CA, para. 24] But this did not change the outcome because the appellate court agreed that the second element was not satisfied because Tbaytel was not required to produce the harm or know that it was substantially certain to follow. (Importantly, this distinguishes a claim in the tort of intentional infliction of mental distress from an action in negligent infliction of mental distress, which, also importantly, is not available in the employment context.) Tbaytel, said the court, made an offer of accommodation, and therefore it could not be said that it “had subjective knowledge that serious psychological injury was substantially certain to follow” from its conduct, rather than that it was reasonably foreseeable [CA, para. 28].

The court concluded that as a result of its conclusion on the second element of the test, it did not have to address the judge’s finding that Tbaytel’s conduct was “‘flagrant and outrageous'” [CA, para. 29], although it had also been relevant to the trial judge’s finding of constructive dismissal.

Relying on Potter, the Court of Appeal rejected Tbaytel’s argument a single act cannot ground a finding of constructive dismissal. Wagner J. (as he then was) did refer to the second approach to constructive dismissal as
necessarily retrospective, as it requires consideration of the cumulative effect of past acts by the employer and the determination of whether those acts evinced an intention no longer to be bound by the contract. [Potter, para. 33] Treating constructive dismissal as requiring more than a single act, however, according to the Court of Appeal in Calistro, would be “rigid” and “contrary to Potter”; “a stand-alone incident can render an employee’s continued employment intolerable”, depending on the circumstances [CA, para. 42]. The court relied on the obiter in the pre-Potter Court of Appeal decision in General Motors that only “particularly egregious stand-alone incidents” can constitute a poisoned workplace, which was at issue in that case [Colistro, CA, para. 45].

The Court of Appeal took into account that Fregeau J. had found that Mr. Benoit had sexually harassed Ms Colistro in 1995, that Tbaytel hired Mr. Benoit despite knowing that Ms Colistro’s 1995 complaint had been one of the reasons he had been terminated in 1996, that Ms Colistro “was a valued employee with an unblemished 20-year history with the company” and that Tbaytel knew that Ms Colistro “was shocked and very upset by its hiring of Mr. Benoit and ‘vehemently’ opposed to his continued employment” [CA, para. 46] in upholding the trial judge’s finding on constructive dismissal. Thus although Tbaytel referred to the sexual harassment complaint as “accusations of 11 years ago”, it knew this was not accurate: the complaint was more than an allegation. The crux of the Court of Appeal’s decision on constructive dismissal is the following:

Although Tbaytel frames its February 6, 2007 letter as a single act, as found by the trial judge, the letter took its significance from the sexual harassment and ensuring investigation that led to Mr. Benoit’s termination in 1996. Whether the letter communicating Tbaytel’s decision to re-instate Mr. Benoit despite his past conduct is viewed as a particularly egregious, stand-alone incident or the last in a series of past acts with cumulative effect is of no consequence[,] I am not convinced that the trial judge committed a palpable and overriding error in concluding that a reasonable person would see the appellant’s continued employment as intolerable under such circumstances and I defer to his finding. [CA, para. 49]

This would have been sufficient to address the issue; however, Hoyt ACJO went further, saying that there is an overlap in the two Potter approaches:

Some courts have found constructive dismissal based on the breach of an implied term or duty that the employer will treat the employee with civility, decency, respect and dignity [citations omitted] or that the work atmosphere be conducive to the well-being of the employees [citations omitted]. The trial judge could have approached his task by considering whether there was a similar implied term in the appellant’s contract and a sufficiently serious breach to constitute constructive dismissal. [CA, para. 50]

Although the Court of Appeal did not grant leave to appeal the trial judge’s costs order (based on his view that Tbaytel and the City were substantially successful), it did not order costs for the appeal because of the parties’ mixed success.

This saga began in 1995 and 1996, not only because that is when Ms Colistro complained about Mr. Benoit, but also because it seems that the City of Thunder Bay avoided making a difficult business decision then by terminating Mr. Benoit without cause. An investigation at that time resulted in a memo from Greg Alexander, the City’s General Manager of Human Resources in 1995, that stated the following, with respect to the sexual harassment:

Mr. Benoit has been documented to have made frequent and inappropriate references to women’s breasts in his conversations with them. It is reported that he also uses sexually suggestive language in his daily activities and, as described by one interviewee “acts like he is in a bar.” Given Mr. Benoit’s position of supervisory authority over these employees, this kind of behaviour is unacceptable by any standard.

In summary, the picture painted…is of a control-oriented supervisor who attempts to dominate certain of his subordinates through various forms of harassment and in so doing creates a very stressful work environment which must not be allowed to continue. [SCJ, para. 57]

Sharon Hacio had been involved in the investigation of the concerns of sexual harassment and financial wrongdoing in 1995 and, indeed, had been the person who terminated Mr. Benoit in January 1996; she testified at trial that “she advised City council at the time that Mr. Benoit was being terminated because of the sexual harassment complaints, misappropriation of funds and managerial ineffectiveness but that on the advice of the City solicitor the termination was without cause” [SCJ, para. 58].

Following Mr. Benoit’s dismissal from the workplace, Ms Colistro continued to work there. Although the City did not confront the difficulties involved in terminating Mr. Benoit’s employment for cause, in light of all the evidence, it nevertheless took the appropriate step in dismissing him (despite Mr. Diedrich’s ostensible “travesty” comment). Nothing in the trial decision to suggest that there were any further concerns and, indeed, Ms Colistro e was described as a “valued” employee.

Stepping aside from this case for a moment, it is not hard to imagine what a nightmare it would be for a woman who had been harassed by a supervisor who had been terminated to find that same harasser would be returning to the workplace 11 years later. Not only would it bring back all that had occurred a decade ago, but would raise fears that it would happen again. Hence Ms Calistro’s diagnosis of PTSD. Furthermore, even after the new people at Tbaytel had the opportunity to find out what had happened previously, they preferred to bring Mr. Benoit back even though it meant losing Ms Colistro. Justice Fergeau’s comments (that Tbaytel’s conduct was “flagrant and outrageous … grossly unfair, unduly insensitive and in blatant disregard of her interests”) illuminate the degree to which Ms Colistro’s contributions and her experiences were diminished [SCJ, para. 325].

It is not difficult to infer from both the appellate decision and, perhaps even more particularly, the trial decision that neither court was impressed by the employer’s behaviour. Indeed, Fergeau J. was blunt in saying, “Tbaytel could have aborted the hiring of Mr. Benoit. He had been hired on a probationary basis effective February 19, 2007. They chose not to in favour of bringing Mr. Benoit on board assuming they could accommodate Ms. Colistro, whom Mr. Diedrich described as a ‘valuable employee.’” [SCJ, para. 275] And he was explicitly or implicitly critical of at least Ms Seeley and Mr. Diedrich’s testimony. Associate Chief Justice Hoy draws the interests starkly at the outset of the Court of Appeal’s decision: “This appeal considers the consequences that flow from a company’s decision to place its business interests above the expectations and concerns of a valued, long-time employee” (CA, para. 1].

Nevertheless, in thinking about how the parties fared, we are left with this: Mr. Diedrich and Ms Seeley hired the person they wanted, despite his previous conduct at the City, and Ms Calistro forced to remember that previous conduct, had to leave her workplace and a job about which she said she “felt very good, felt wonderful about my job, loved my job, enjoyed going to work” [SCJ, para. 34]. And while she received some vindication, perhaps, in the success of her claim of constructive dismissal, she ended with having to pay her own lawyer and a $200,000 costs award, on the one hand and net damages of $114,082 (including the $100,000 Honda award) on the other. The choices for Ms Calistro, it seems, was to reconcile herself to seeing her harasser on some regular or irregular basis, knowing that ultimately he was preferred by Mr. Diedrich and Ms Seeley to her, or agreeing to settle (she refused more financially favourable settlement offers), but not to seek vindication through the courts. Even when the courts are sympathetic, lawyers would advise most clients that personal vindication can come at a high cost.

Comments

  1. It is hard to understand the costs order against Ms Calistro, given that she succeeded in the essential claim, which was constructive dimissal because of egregrious conduct by the employer. The fact that some of the collateral damage claims were not upheld is a minor matter compared to that. So the system and the courts clearly failed her, as her employer was held to have done.

  2. John, I was going to say a little more about costs. On the one hand, it was a mixed result at trial, as it was in the Court of Appeal, which didn’t award costs for that reason. On the other hand, there had been two settlement offers, which, apparently, were higher than the damages she was awarded. The trial judge did not apply r.49.10(2) of the Rules of Civil Procedure; he awarded the employer partial indemnity costs, but not Ms Calistro. The CA referred to the “stringent” test for leave to appeal cost orders; leave won’t be granted except in “obvious cases” in which there are “strong grounds” that the judge erred in exercising discretion re costs. Having said all that, I also thought it was harsh to award costs to the employer in the circumstances.

  3. “Plus ça change, plus c’est la même chose” – Karr
    .
    So, in summary, the finding was that the employer had negatively impacted an employee by rehiring a sexual harasser, but :-
    .
    1. The employer was awarded costs which exceeded the monetary award to the victim.
    2. The sexual harasser got to keep his job.
    3. The victim lost her job; has to pay her own legal costs AND has to pay $200,000 of her former employer’s legal costs. The costs award against her was almost double the damages she received.
    .
    There is definitely a message of deterrence in here but it isn’t deterrence for sexual harassers or for employers who enable those behaviours.

  4. I can’t believe this is our justice system for women who are sexually assulated . There are no words to describe this decision. All I can say is shame on the courts that Judge for ruling in this matter . Tell me does this set an example for women who are abused, harassed sexually in the workplace what kind of messsge are we sending out to women ??? Excuse me but it’s not a very supportive community when you have to go all the way to the supreme courts to fight for your well being … not sending out a very good message to women so all !! There’s going to be women out there that will not speak up so to this un comprehensible decision doesn’t say much for the justice system!!!! 😡😡😡😡😡😡😡

  5. Angela, I should just clarify that Ms Calistro did not allege that Benoit had sexually assaulted her; she did say (and there was support for it) that he sexually harassed her, as you mention later in your comment. And perhaps you mean women should not have to go to court at all to fight for their well being, but again, she did not go to the Supreme Court of Canada, but first to the trial court and then (and the employer did, too)to the Court of Appeal, the highest court in Ontario. The case she brought was that she was constructively dismissed (she won on this) and intentional infliction of mental suffering related to the way the employer had treated her in the process of hiring Benoit. She wasn’t bringing a case of sexual harassment, although, of course, sexual harassment loomed large in the proceedings.

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