Employer

Union ordered to pay $500,000 for making defamatory statements about employer

In Civeo Corporation v. unite here, Loc. 40 (Employer’s defamation claim), [2022] BCCAAA No. 39 (glass), Civeo Corporation (there “Employer“) filed an employer grievance alleging that unite here, Loc. 40 (the “union“) made defamatory statements and committed other breaches of the collective agreement.

The Employer operates a workforce accommodation facility. In 2018, the parties entered into a letter of agreement which sets out the conditions related to working at the Employer’s operations at Kitimat, BC (there “LOU“). The letter of agreement contained a number of conditions, particularly with regard to the hiring of skilled workers from the region, including indigenous workers. In 2021, the union indicated that it was not satisfied with the terms of the letter of settlement and sought to renegotiate them. The Employer was not open to this. In response, the Union issued the following statement, which formed the basis of the Employer’s grievance:

At Civeo broken promises to First Nations peoples:

  • Low salaries.
  • Decrease in the hiring of Aboriginal workers over the past two years.

It means that Civeo has shown no commitment to improving the standard of living of indigenous workers and their families. (together, the “Disputed statements“)

The union raised a preliminary objection regarding the arbitrability of the defamation claim. This objection was overruled by Arbitrator Glass in an award dated December 15, 2021.

The merits of the employer’s grievance and the appropriate measure of damages were considered by the arbitrator in [2022] BCCAAA No. 39.

Arbitrator Glass found that the impugned statements were indeed defamatory. The conduct of the union, taken as a whole, breached its duty of good faith in the administration, application and enforcement of the collective agreement. There was no factual basis for the disputed statements and the implication was that At Civeo conduct was analogous or comparable to the historically unethical and negative treatment of Aboriginal peoples.

In defending the allegation, the union raised two alternative defenses – the justification defense and the fair comment defense. Arbitrator Glass rejected the show cause argument on the grounds that the union had failed to prove that the employer had breached any of its wage or hiring commitments under the letter of settlement. The arbitrator dismissed the fair comment argument because the impugned statements clearly amounted to an assertion of fact rather than a commentary and were not based on any proven fact.

Decision

After finding that the union defamed the employer without a proper defence, arbitrator Glass turned to the issue of damages. After considering the factors relevant to the defamation claims and the award of punitive damages, the arbitrator ordered the union to pay $400,000 in general damages and $100,000 in pecuniary damages. He also ordered the union to retract the disputed statements.

Take away food

This case serves as a useful reminder that labor arbitrators have jurisdiction to hear defamation claims and award punitive damages, and this applies to employers as well as unions.

Arbitrators will consider the obligation of the parties to a collective bargaining relationship to act in good faith in the administration, application and enforcement of the collective agreement. Engage in tortious behavior in an attempt to achieve collective bargaining objectives that cannot be achieved through legal negotiations or, for that matter, through legal dispute resolution processes under the collective agreement will constitute a breach of the duty of good faith and may constitute an independent basis for an award of punitive damages.

Moreover, and as this case illustrates, the damages awarded by arbitrators can be very significant.

Previously printed in the LexisNexis Labor Notes Newsletter.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

Mrs Sabrina AnisRoper Greyell LLP – Labor and Labor Lawyers
1850-745 Thurlow Street,
Vancouver
British Columbia
CANADA
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