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In Civeo Corporation c. Unite Here, Loc. 40 (Employer’s defamation claim),  BCCAAA No. 39 (Glass), Civeo Corporation (the “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 terms and conditions related to working at the Employer’s operations in Kitimat, British Columbia (the “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:
Civeo’s broken promises to First Nations:
- Low salaries.
- Decrease in the hiring of Aboriginal workers over the past two years.
This means that Civeo is not committed 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  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 Civeo’s conduct was analogous or comparable to the historically unethical and negative treatment of Indigenous peoples.
In defending the allegation, the union raised two alternative defenses – the defense of justification and the defense of fair comment. 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.
After finding that the union defamed the employer without a proper defence, arbitrator Glass turned to the issue of damages. After reviewing the factors relevant to the defamation claims and the award of punitive damages, the arbitrator ordered the Syndicate to pay $400,000 in general damages and $100,000 in monetary 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.
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