Canada: Class Actions In Canada—Part 3: Sexual Harassment And Discrimination Class Actions

In the third installment of our series on class actions, we examine the nascent state of sexual harassment and discrimination class actions in Canada.

Recent developments are aligning to create conditions conducive to the rise of these class actions; the sphere of employment class actions has been expanding beyond the ubiquitous overtime pay cases in recent years.

The #metoo movement and high profile allegations of sexual misconduct have put a spotlight on workplace sexual harassment and changes to provincial legislative regimes have removed limitation periods for civil litigation based on sexual assault claims.   

In this article, we explore the foundation for sexual harassment and discrimination class actions by reviewing the following areas:

• The law on employers' obligations
• Elimination of limitation periods for sexual assault cases
• Types of claims and causes of actions that have been commenced, to date, both in the public and private sectors
• Possible barriers to these claims that may not make them amenable to class action status.

Employers' Obligations

In its 1987 decision in Canadian National Railway Co. v. Canada (Canadian Human Rights Commission), the Supreme Court of Canada defined sexual harassment in the workplace as "unwelcome conduct of a sexual nature that detrimentally affects the work environment or leads to adverse job-related consequences for the victims of the harassment." It also defines gender-based discrimination in the workplace as "practices or attitudes which have the effect of limiting the conditions of employment of, or the employment opportunities available to, employees on the basis of a characteristic related to gender..." A decision released by the Court a few years later in Janzen v. Platy Enterprises Ltd. made clear that discrimination includes sexual harassment. 

Employers have statutory and common law obligations to ensure a work environment free of both sexual harassment and gender-based discrimination.

Employers have statutory and common law obligations to ensure a work environment free of both sexual harassment and gender-based discrimination. In Ontario, these obligations include the Occupational Health and Safety Act (OHSA) requirements that employers with five or more employees have written policies on workplace violence and harassment and that those policies be reviewed at least annually. OHSA also requires employers to have procedures in place for reporting and investigating harassment. The Ontario Human Rights Code provides employees with the right to be free from harassment based on sex, sexual orientation, gender identity, and gender expression. Employers have an obligation under the Code to take steps to prevent and respond to sexual harassment. Finally, in certain circumstances, employers may be vicariously liable for discrimination committed by employees, including for the creation of a "poisoned work environment."

At common law, while sexual harassment is not a stand-alone tort, employers can face constructive and wrongful dismissal lawsuits for sexual harassment experienced at work. Employers can also be liable for mental distress damages when an employee has been exposed to harassment in the workplace and the employer is seen as not having taken appropriate steps to address it.

To date, in Canada, there have been no contested decisions defining employers' obligations in this area on a systemic scale in the class action context.

Elimination of Limitation Periods for Sexual Assault Cases

Legislative reform in Ontario has eliminated limitation periods for "proceedings based on a sexual assault." Similar legislative reform has taken place in British Columbia, Saskatchewan, Manitoba and Nova Scotia. There are no reported decisions that have yet considered these provisions in respect of an employer's obligations to its employees. As a result, it is not yet clear the extent to which these reforms will apply to claims brought by employees against their employers with respect to workplace sexual harassment. However, the Ontario Superior Court interprets the Ontario legislation broadly. The provisions have been held to apply not only to perpetrators of assaults but also to those who may be civilly liable in connection with the assaults. In one decision, the Court noted the legislation was intended to address "broad systemic problems relating to sexual harassment and assault."¹

Types of Claims and Causes of Action

Sexual harassment and discrimination class actions have a longer history in the United States than in Canada. Claims against employers by current and former employees alleging failure to maintain a workplace environment free from discrimination and sexual harassment have been commenced in a variety of industries in the U.S., including technology, entertainment, and retail. These claims have ranged from disputes relating to discriminatory pay and promotions practices,² to claims that employers have failed to prevent systemic sexual harassment. Employers in Canada are only now beginning to be faced with such claims.

To date, Canadian employees have commenced gender-based discrimination and harassment class actions against the following employers:

• The RCMP (Davidson v. Canada (Attorney General) and Merlo v. Canada (Attorney General)). The claims allege all female employees were subjected to sexual discrimination, bullying, and harassment by male members of the RCMP for which the RCMP is liable. The claim dates back to September 16, 1974, when women were first eligible to join the RCMP. The causes of action pleaded include negligence and breach of contract. Damages are sought for failure to provide a "workplace free of gender - and sexual-orientation-based discrimination, bullying and harassment." In May 2017, a settlement in these matters was approved by the Federal Court, with an estimated payout of approximately $89 million.³
• The Canadian Armed Forces (Heyder, Graham, Schultz-Nielsen v. the Attorney General and Ross, Roy, Satalic v. Her Majesty the Queen). Two proposed class actions have been commenced against the Canadian Armed Forces alleging systemic failures to prevent sexual assault and harassment by discouraging victims from reporting, failing to have proper training and policies in place, failing to investigate reported incidents, and retaliating against members who come forward. Heyder, Graham, Schultz-Nielsen v. the Attorney General is brought on behalf of all current and former female members of the Canadian Armed Forces, with an open class period. The claim seeks $800 million in damages for negligence, breach of fiduciary duty, charter damages, and $50 million in punitive damages. Ross, Roy, Satalic v. Her Majesty the Queen is brought on behalf of LGBT public servants and members of the military who allege they faced discrimination and harassment because of their sexual orientation, referred to as the "LGBT Purge" policy dating back to 1969. This claim seeks unparticularized damages for negligence, breach of fiduciary duty, wrongful dismissal, abuse of authority, breach of privacy and intentional infliction of mental distress, and charter damages. Settlements have been reached in each of the claims against the Armed Forces, but approval hearings have yet to take place.
• The Waterloo Regional Police. Two current police officers and one former officer have commenced a proposed class action against the police board and union alleging that the defendants have fostered a culture of sexual harassment that leaves female officers afraid to report misconduct. The claim seeks $100,000,000 for negligence, harassment and Charter damages.
• West Jet (Lewis v. WestJet Airlines Ltd). A former flight attendant commenced a proposed class action on behalf of all present and former flight attendants seeking damages for breach of contract and systemic gender-based discrimination. The claim alleges that West Jet's failure to properly investigate and respond to claims of sexual harassment amounts to a systemic breach of employees' employment contracts, incorporate the company's Anti-Harassment Policy.
• Just for Laughs (Les Courageuses c. Gilbert Rozon). An application for a proposed class action in Quebec has been commenced by a not-for-profit organization called Les Courageuses on behalf of all victims of sexual assault and harassment perpetrated by Just for Laughs co-founder, Gilbert Rozon. The claim alleges Rozon systematically abused his position of power and influence to abuse his victims with the expectation they would not have the courage to come forward and would not be believed. The plaintiffs seek unparticularized damages from Rozon for sexual assault and harassment, and $10,000,000 in punitive damages.

Possible Barriers to These Claims

Taking into account U.S. experience and the developments in the Canadian actions commenced to date, there is reason to believe that class actions seeking to remedy alleged systemic gender-based discrimination and harassment may face certain barriers. 

• Evidentiary standards of proof. In the U.S. class action Wal-Mart v. Dukes, the Supreme Court ruled the plaintiffs' claim that Wal-Mart engaged in a pattern or practice of discrimination against women was incapable of proof on a class-wide basis. The claim was based not on established policy, but on the alleged practice of local managers exercising their discretion over pay and promotion decisions in favour of men. The Court held that in light of Wal-Mart's policy forbidding sex discrimination and its imposition of penalties for the denial of equal employment opportunities, the plaintiffs had failed to meet their burden of establishing "significant proof" that Wal-Mart "operated under a general policy of discrimination." There was insufficient proof that broad managerial discretion, exercised across a nation-wide network of 3,400 stores, operated in a systemically discriminatory manner.⁴ Although significant differences exist between class action law in Canada and the United States, the case demonstrates possible hurdles plaintiffs will face in establishing class-wide liability for systemic gender-based discrimination and harassment claims, even if certification is granted. This is particularly true where employers have robust anti-discrimination policies in place.
  
  In Canada, the Federal Court decision approving the RCMP settlement notes the existence of various defences open to the defendants in that case and the difficulties the plaintiffs would face in proving their claim, both at certification and at a common issues trial on the merits.⁵
  
  
  • Cause of action. In both the RCMP and West Jet class actions, courts have refused to certify certain aspects of the claims as disclosing no cause of action. In the West Jet litigation, the British Columbia Supreme Court cautioned that the plaintiffs' claim for breach of contract, brought on the basis the employment contracts incorporated West Jet's Anti-Harassment Promise, came close to the line of being a "fiction" rather than a simple claim for discrimination. The Court struck certain claims that were clearly and simply seeking damages for discrimination. Those claims, the Court explained "should be brought under the Human Rights Act."⁶
  • In the Ontario RCMP case, the Superior Court struck the plaintiffs' claim alleging that the Crown, as employer for the police officer members of the RCMP, breached the class members' employment contracts. Although the reasoning was based on the unique statutory relationship among the Crown, the RCMP, and RCMP members, the decision demonstrates that depending on the particular employment relationship at issue, the courts' jurisdiction may be ousted.⁷
  • Preferable procedure hurdles.A required element for certification of class actions in the Canadian common law provinces is for the plaintiff to establish some basis in fact to prove that litigation of the claim as a class action is preferable to all other forms of dispute resolution, including non-litigation alternatives.⁸ For a variety of reasons, claims alleging systemic gender-based discrimination and harassment brought by employees against their employers might not meet this test.
    
    
    • First, in considering preferability, courts consider the relief available through civil litigation and whether that relief will meet the procedural and substantive access to justice sought by class members. The structure of the RCMP settlement demonstrates elements of the relief that may be most important to class members in these cases would not be available through civil litigation.⁹ The RCMP settlement includes a public apology, institutional change initiatives aimed at eliminating harassment in the RCMP, and the creation of a scholarship. Such relief, including orders that employers amend or adopt their workplace policies and codes of conduct to ensure a workplace free from discrimination and harassment, is available through the provincial and federal human rights tribunals but not through civil litigation in courts.¹⁰
    • Human rights tribunals have also historically been the forum for such claims (and indeed claims for sexual harassment in Ontario fall under the exclusive jurisdiction of the Human Rights Code¹¹). These tribunals have therefore developed unique expertise in this area and proceedings at the tribunal level may be preferable to class actions. In fact, many provincial tribunals and the federal Human Rights Tribunal permit collective actions.¹²
    • Second, certification motion judges must also consider barriers to access to justice that exist for proposed class members by litigating their claims as class actions. Judges must consider whether proceeding in a non-litigation forum might better address those barriers. The RCMP settlement structure suggests that in the context of highly personal claims alleging sexual harassment and assault, the adversarial litigation process may pose severe barriers to access to justice. The RCMP settlement permits claims to be resolved through a confidential and non-adversarial process with numerous safeguards to protect the privacy of claimants.¹³ The confidentiality procedures are by no means guaranteed in civil litigation while the non-adversarial nature of the process is clearly contrary to proceedings in court.

Key Advice for Employers

Employment class actions generally attract significant media attention and pose serious reputational risks for employers. This is compounded where the claim alleges gender-based discrimination and harassment. In addition, in light of the recent amendments to limitation period legislation (and the claimant-friendly interpretations that have been made to date of these provisions), the risks associated with such lawsuits may be quite significant. As a result, in order to best protect their reputations and to ensure they are compliant with the law, employers should implement the following:

• a clear, comprehensive, anti-sexual harassment and discrimination policy providing that harassment and discrimination will not be tolerated and alerting all parties to their rights, roles, and responsibilities;
• a transparent report/complaint procedure, including a mechanism for anonymous reporting, which sets out how complaints will be investigated, by whom, and how they will be resolved; and
• robust training provided to everyone in the organization to ensure widespread awareness and understanding of workplace policies and the steps that exist for resolving complaints.

Footnotes

1 Jane Doe v. Weinstein, 2018 ONSC 1126, para. 24.

2 Wal-Mart faced a claim that its "corporate culture of sex discrimination" affected every female employee as managerial discretion in respect of pay and promotion was exercised disproportionately in favour of male employees. The U.S. Supreme Court decertified the nation-wide class in Wal-Mart v. Dukes, No. 10-277, primarily on the basis that the plaintiffs had failed to show commonality, as set out here.

3 Merlo, Davidson v. The Queen, 2017 FC 533.

4 Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 (2011), pp. 9-11.

5 T: Davidson v. The Queen, 2017 FC 533, paras. 20-22, 25, 36-38

6 Lewis v. WestJet Airlines Ltd., 2017 BCSC 2327, paras. 49, 50, 55, 56

7 Davidson v. Canada (Attorney General), 2015 ONSC 8008, paras. 35-40.

8 AIC v. Fischer

9 Davidson v. The Queen, 2017 FC 533, paras. 2, 10, 33, 42, 43. See here for the settlement agreement.

10 Davidson v. The Queen, 2017 FC 533, paras. 10, 33. For example, the Ontario Human Rights Tribunal can order a party to do "anything it ought to do" to promote compliance with the Human Rights Code (s. 45.2). Recent tribunal cases have required employers to adopt a written policy for dealing with complaints of sexual harassment, including the establishment of a complaints and/or investigations procedure. The Tribunal may also order relevant staff to complete the Ontario Human Rights Commission's basic on-line training "Human Rights 101": Crete v. Aqua-Drain Sewer Services Inc., 2017 HRTO 354; Sheldon v. St-Marys Ford Sales Ltd., 2017 HRTO 497; Granes v. 2389193 Ontario Inc., 2016 HRTO 821.

11 K.L. v 1163957799 Quebec Inc., 2015 ONSC 2417, at para. 26.

12 Canadian Human Rights Act, R.S.C. 1985, c. H-6, s. 40; Human Rights Code, R.S.B.C. 1996, c. 210, s. 21(4)(b); The Human Rights Code, C.C.S.M., c. H175, s. 22(1), and see definition of "person" under s. 1; Human Rights Act, S.N.W.T. 2002, c. 18, s. 29(1); Human Rights Act, S.Nu 2003, c. 12, s. 21, 22(1)(b); Charter of human rights and freedoms, C.Q.L.R., c. C-12, s. 74; The Saskatchewan Human Rights Code, S.S. 1979, c. S-24.1, s. 27(1)(b).

13 Davidson v. The Queen, 2017 FC 533, paras. 10, 27, 32

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.