Employers must deal effectively with workplace harassment. Historically, individual managers were held liable only in the worst cases. A decision of the Human Rights Tribunal of Ontario shows you can't rely on corporate liability as a shield. In Farris v. Staubach Ontario Inc., two manager-owners were held personally liable for failing to act on harassment in the workplace.
The facts
Katherine Farris worked as a commercial real estate agent for Staubach Ontario Inc. for over nine years. She was regularly subjected to sexualized comments at work, including being called a "crazy bitch". Co-workers also spread a rumour that she was having a sexual relationship with her manager, Mr. McKeague, and assumed she was getting favourable treatment, which kept the harassment going.
Ms. Farris first raised concerns in 2001 with Mr. McKeague and Mr. Leonard, the two manager-owners. The company hired a psychologist experienced in workplace conflict to investigate and make recommendations, and adopted codes of conduct. The harassment continued, and Ms. Farris became more isolated from her colleagues. She was eventually terminated on the basis that she did not work well with others.
The first Tribunal decision
The Tribunal found that Ms. Farris was subjected to a poisoned work environment and differential treatment based on sex. It found Staubach liable, but not the individual manager-owners, and awarded her $30,000 for injury to dignity, feelings and self-respect.
But Staubach had been dissolved in 2007 and could not pay.
Judicial review
Ms. Farris sought judicial review. The Ontario Divisional Court highlighted two basic principles of human rights law:
- a finding of corporate liability is not meant to shield individuals from liability; and
- the focus of human rights legislation is to provide an effective remedy to the complainant.
The Court found the Tribunal's decision inconsistent: it had found that the manager-owners personally violated the Code but did not hold them personally liable. The case was sent back to the Tribunal to consider the need for an effective remedy and the use of the corporation as a shield against individual liability.
The second Tribunal decision
The Tribunal found Mr. McKeague and Mr. Leonard personally liable for $22,500 of the $30,000 award, based on three findings:
- they were responsible for creating the poisoned work environment;
- they failed to adequately recognize and respond to Ms. Farris' concerns, which made the poisoned environment worse; and
- the poisoned work environment was a factor in their decision to terminate her.
Why it matters
The Court and Tribunal accepted that corporate liability should not shield individuals. That opens the door to more findings of personal liability against managers in appropriate cases, and gives individual managers more reason than ever to act on human rights violations in the workplace.