Employers are required to deal effectively with workplace harassment. Historically, individual managers have been liable only in the worst cases. But a new decision out of the Human Rights Tribunal of Ontario shows you can’t rely on corporate liability as a shield against personal liability. In Farris v. Staubach Ontario Inc.(PDF), two manager-owners were held personally liable for failing to take action against harassment in the workplace.
Katherine Farris worked as a commercial real estate agent for Staubach Ontario Inc. (“Staubach”) for over 9 years. She was regularly subjected to sexualized comments in the workplace, including being called a “crazy bitch”. Co-workers also spread a rumour that she was having a sexual relationship with Mr. McKeague, her manager. As a result, other co-workers presumed Ms. Farris was receiving favourable treatment and the harassment was perpetuated.
Ms. Farris initially raised concerns in 2001 to Mr. McKeague and Mr. Leonard, the two manager-owners. In response, the company hired a psychologist with experience in workplace conflict issues to investigate and make recommendations. Codes of Conduct were adopted. But the harassment persisted. Ms. Farris became further isolated from her colleagues. Ultimately she was terminated on the basis she did not work well with others.
First Human Rights Tribunal Decision
The Tribunal found that Ms. Farris was subjected to a poisoned work environment and differential treatment based on sex. The Tribunal found Staubach liable but not the individual management-owners. Ms. Farris was awarded $30,000 for injury to dignity, feelings and self-respect.
But Staubach had been dissolved in 2007 and was therefore unable to pay.
Ms. Farris sought judicial review of the decision. The Ontario Divisional Court decision highlighted two fundamental principles of human rights law:
- A finding of corporate liability is not meant to act as a shield against finding individual liability; and
- The focus of human rights legislation is to provide an effective remedy to the complainant.
The Court found that the Tribunal’s decision was inconsistent. While the Tribunal found that the manager-owners had individually violated the Code, it did not find McKeague and Leonard personally liable.
The Court sent the case back to the Tribunal for reconsideration. The Tribunal was required to:
- consider the need to provide an effective remedy; and
- consider the use of the corporation as a shield against individual liability.
Second Tribunal Decision
Using the criteria set out by the Court, the Tribunal revised its decision. It found McKeague and Leonard personally liable for $22,500 of the $30,000 award.
Their personal liability was based on three key findings:
- Mr. McKeague and Mr. Leonard were responsible for the creation of the poisoned work environment;
- Mr. McKeague and Mr. Leonard failed to adequately recognize and respond to Ms. Farris’ concerns, which exacerbated the poisoned work environment; and
- The poisoned work environment was a factor in Mr. McKeague’s and Mr. Leonard’s decision to terminate Ms. Farris.
Employers must keep in mind that the Court and Tribunal accepted that corporate liability should not be a shield for personal liability. The door has now been opened wide for further findings of personal liability of managers in appropriate cases. As such, individual managers have greater incentive than ever to take appropriate action to address human rights violations in the workplace.