The Ontario Court of Appeal in Kitzman v. Babcock & Wilcox Canada Ltd. reversed a trial judgment as related to Wallace v. United Grain Growers Ltd. damages. In doing so, the Court of Appeal relied upon:
- The employee first claimed Wallace damages in his opening at trial and this claim was based solely on the failure of the employer to warn the employee of the impending dismissal and the failure to give the employee an opportunity to explain his conduct.
- In awarding Wallace damages, the trial judge not only took these matters into account, but also focused on three other matters not pleaded or argued by the employee most significantly the suggestion that (a) certain employees of the employer had effectively engaged in a conspiracy to get rid of the employee and (b) that the counterclaim was motivated by what amounted to bad faith and could be seen as, according to the trial judge, a “loud and clear warning to any employee who dare[d] to sue [the appellant] for wrongful dismissal”.
I will be speaking at the Quebec Bar Association's conference L'ABC des cessations d'emploi et des indemnités de départ on September 27, 2007 where I will be giving a presentation on common law trends in employment law which will include an update on Wallace claims. This case, among many others of late, emphasizes a growing judicial resistance to the "as of course" Wallace claim that seems to find its way into virtually every statement of claim.
A senior partner of mine, a long time ago, counseled me when pleading or arguing cases to go with "your longest and strongest" argument and that, to the extent you throw everything at the wall in the hopes that it will stick, you simply dilute and weaken your strongest arguments. If you don't have a Wallace claim (or a claim for punitive damages, another abused claim in employment law following Keays v. Honda Canada Inc (stay tuned, leave to appeal to the Supreme Court of Canada was granted), then avoid the temptation of pleading it. I will resist the temptation of using more colorful metaphors here, to describe what I mean, but it was good advice, I believe, and I was truly grateful to receive it. I've tried to follow it (with varying degrees of success) in everything I do when defending clients.
While making a presentation some months ago to the employment bar at the Ontario Bar Association of Wallace damages I was asked "whose responsible for all of these Wallace claims?" and I believe, that initially, the lawyers are. In our zeal to defend our clients interests there's a natural tendency to want to fight on every front and raise everything. But clients come to us, not only to vigorously defend their interests, but to provide advice on the likelihood of success and options. I find that we need to heed the words of the Supreme Court of Canada to the effect that Wallace damages and punitive damages are exceptional claims to be awarded in exceptional cases where the circumstances warrant.
I come back, often, to my former partner, Mr. Justice Randy Echlin's words in Yanez v. Canac Kitchens Inc. (which I have written about frequently on this blog and elsewhere). Though Justice Echlin was not the senior partner who gave me the advice I mentioned earlier, his words in Yanez, provide common sense counsel to all of us. Avoid matter of course pleadings (he was speaking of specious Wallace claims, but it goes beyond that). When I receive "out-of-the-can" or fill in the blanks statements of claim or demand letters, my initial reaction is "here we go again" and while I take it seriously, I do wonder about the merits of the claims. Most cases are won or lost on the facts, not on the law. If the facts support a pleading, by all means plead it and push it. If not, let it go and move on to where the strength in the case lies.