Wrongful Dismissal Cases: When Can Members of Management be Sued Personally?

The idea of adding members of management as defendants in wrongful dismissal cases against corporate employers is not a new one.  The case of Watson v. TrojanOne Ltd., Harrison and Lee is a useful reminder of the current status of the law in this area.

In this case, the Plaintiff, Watson, sued his former employer, TrojanOne, as well as two individuals named Harrison and Lee.  Harrison was TrojanOne’s President and CEO and Lee was its Chief Creative Officer.

The matter came before the court by way of a motion brought by Harrison and Lee to have the action dismissed as against them on the basis that Watson did not have the right to sue them personally.

The judge summarized the law on the point by indicating that the officers of a corporation are not liable personally for what they do within their authority and on behalf of their corporation.  However, they may be liable in an action against the corporation if there is some conduct on the part of the officer that is either tortious in itself, or that amounts to misconduct that is independent from that of the corporation.

Historically, this point has come up rather frequently in cases in which a Plaintiff sues an officer of the corporate employer for inducing the company to breach the contract of employment with the Plaintiff by terminating the employment without reasonable notice.  It is clear in such cases that unless the officer can be said to have acted in bad faith and against the company’s best interests, he or she cannot be sued for inducing breach of contract where a claim for breach of contract is available against the company.

As a result, for an officer of an employer company to be liable, the claim against that individual must specifically identify the cause of action that is asserted against the officer and explain why he or she is being sued separately from the company.

It is to be kept in mind that this matter came before the court as a procedural attack on the statement of claim as against Harrison and Lee.  The only question before the Court was as to whether or not a case against those individuals had been properly pleaded.

The statement of claim contained the usual pleadings as against TrojanOne.  With respect to both Harrison and Lee, it contained a series of quotes allegedly attributable to each of Harrison and Lee in which they are alleged to have made a variety of degrading and humiliating statements to Watson and others.  Some of the statements even had racist overtones.

The Plaintiff’s allegation was that this conduct created a poisoned and hostile work environment causing the Plaintiff to suffer from severe anxiety and depression for which he sought and received medical treatment and therapy.

At some point, a public altercation took place in which the Plaintiff was physically threatened and verbally abused.  The Plaintiff alleges that as a result, he had to stop work and take a leave of absence immediately for medical reasons.

According to Watson’s Statement of Claim, this all amounted to constructive dismissal.  Watson alleged that the conduct of Harrison and Lee was flagrant and outrageous, they intended to harm Watson or, at least, knew that their conduct would cause harm, and Watson suffered a visible and provable illness.  As a matter of law, these are the elements of the tort of intentional infliction of mental distress.

Accordingly, the Court concluded that Watson had adequately pleaded that independent actionable wrongs had been committed by Harrison and Lee. The case was permitted to proceed against them as well as against TrojanOne.

It would seem to follow logically that where a member of management is verbally abusive or conducts himself or herself in a manner that creates a poisoned work environment, and that conduct causes visible and measureable harm, that conduct will never be considered to be in the best interests of the company and may well serve as the basis of a claim against him or her personally.

 

Advertisements

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s