Williams HR Law LLP

A “SLAPP” TO THE FACE: ONTARIO COURT DISMISSES EMPLOYER’S $1.5M DEFAMATION CLAIM AGAINST FORMER EMPLOYEE

October 5, 2023

In the age of social media, organizations face a range of challenges, and chief among them is online disparagement by former employees. This issue came to the forefront in Williams v Vac Developments Limited [Williams], where a former employee not only made highly critical comments about their former employer to a news outlet, but also claimed wrongful dismissal. While the wrongful dismissal claim is still being litigated, the Ontario Superior Court of Justice (the “Court”) has granted an “anti-SLAPP” motion to dismiss the employer’s $1.5 million defamation counterclaim.

Facts and Background

The employee worked for the employer for three and a half years before he was laid off. The employer attributed the layoff to the economic impact of the COVID-19 pandemic. However, the employee alleged that the layoff was a form of retaliation against him for insisting that his employer engage the police regarding the workplace harassment and anti-Black racism to which he was subjected. Both parties agreed that at least two instances of such harassment had occurred, which the employer described as “reprehensible and unacceptable”.

CTV News interviewed the former employee and published an article that named the employer. The article quoted the employee regarding his feelings that the employer had failed to ensure his safety and respond appropriately to workplace harassment and discrimination. The employer declined to provide a comment for the article.

Following the article’s publication, the employee initiated a wrongful dismissal claim, to which the employer counterclaimed for $1.5 million in damages for defamation based on the article. Subsequently, the employee brought a motion under the Courts of Justice Act [CJA], arguing that the employer’s defamation claim constituted a SLAPP that should be dismissed.

What is a SLAPP?

Strategic Lawsuits Against Public Participation (colloquially referred to as “SLAPP”s) are legal actions initiated against individuals or organizations that speak out or take a position on an issue of public interest. These lawsuits are used by the plaintiff as an indirect means to intimidate the defendants into abandoning their positions, which are often critical of the plaintiff.

In 2015, in an effort to address the growing number of SLAPPs, the Ontario legislature amended the CJA to introduce “anti-SLAPP” motions: expedited, summary mechanisms for defendants to SLAPPs to seek quicker, more cost-effective dismissals of these lawsuits.

Decision

The Court utilized the three-stage test for dismissing claims pursuant to anti-SLAPP motions. Overall, the Court dismissed the employer’s defamation claim at stage two of the test because of the employer’s failure to adduce sufficient evidence of proof of damages suffered, and to mitigate damages by providing a comment when requested to do so by CTV News.

At stage one, the employee was required to show that their expressions were made in the public interest. In Williams, both parties conceded that the employee’s comments to CTV News were of sufficient public interest.

Stage two required the employer to prove that its claim has “substantial merit”—in other words, the claim must have a real prospect of success that “tends to weigh more in favour of the [employer]”. The Court found that the employer failed to establish substantial merit because it could not prove that the employee’s statement lowered “the company’s reputation in the eyes of a reasonable person”, which is an essential element of a defamation claim. The Court explained that a reasonable reader of the CTV News article would accept that “unreported anti-Black racism is ubiquitous within Canadian workplaces”. As such, the employer’s reputation would only be lowered if it responded inadequately to allegations of anti-Black racism in the workplace after becoming aware of them. Accordingly, the employer’s refusal to provide a comment upon CTV News’ request was interpreted as a failure to mitigate their damages.

Although satisfied that the employer’s counterclaim had failed at stage two, the Court proceeded to consider the third stage of the analysis. At this stage, the Court had to determine whether the harm suffered by the employer as a result of the employee’s statement outweighed the public interest to protect the employee’s expression. In this regard, the Court found that the weighing exercise “overwhelmingly” favoured the protection of the employee’s expression. In coming to this conclusion, the Court noted that the employee’s ongoing wrongful dismissal claim was “modest” ($164,024 claimed in damages), whereas the employer’s $1.5 million defamation counterclaim was “disproportionate and fraught”. The Court further noted that the employer had failed to provide any evidence supporting the amount of damages it claimed to have lost as a result of the employee’s statement, such as proof of a lost client due to the article’s publication. The Court ultimately determined that the employer had “not suffered any actual financial loss” and that the employer’s claim should not interfere with the employee’s expression, as there is significant public interest in protecting expression which addresses anti-Black racism in the workplace.

Takeaways for Employers

Employers who are aggrieved by their former employees’ statements should keep Williams in mind. With the proliferation of social media usage, it is common for former employees to post disparaging remarks about their employers. However, Williams serves as a reminder that litigation is not necessarily the best forum to address these issues, as the Court is eager to protect a broad range of expression in the public interest.

When assessing whether to pursue a defamation claim, employers should note the higher standard to which they will be held by the Court in proving damages. Employers should document any loss of business to which they can link the employee’s statement for the purpose of calculating damages. For example, a client may sever their relationship, or the employer may face increased difficulty recruiting new employees.

For employers who decide that a defamation claim is appropriate in the circumstances, it is essential to mitigate harm caused by the employee’s statement. As such, employers should carefully consider a calculated response to allegations of workplace misconduct when prompted to make a public comment.

Lastly, employers should be cautious in making a defamation claim against a former employee, as the Court may consider these unsuccessful claims during subsequent wrongful dismissal proceedings. In doing so, an unsuccessful defamation claim may be a factor in the Court’s calculation of bad faith/moral damages against the employer for engaging in heavy-handed and strategic litigation.

This blog is provided as an information service and summary of workplace legal issues.

This information is not intended as legal advice.

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