Employers be warned: punitive damages continue to climb

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“The judge instead found that the termination was motivated by the [Gordon’s] demands for additional compensation from the earlier sale, and [Altus’] desire not to pay out the significant notice period that was provided for in the contract of employment,” revealed employment lawyer Frank Portman.

“The judge characterized the case for cause as being an after-the-fact attempt at justifying its actions,” he explained.

The claim

While the compensation granted to Gordon was not unusual – his contract provided a notice period far in excess of his basic entitlements under the ESA – the former employee also claimed punitive damages.

“Punitive damages can be awarded where there is a ‘separate actionable wrong’ apart from the simple fact of dismissal,” Stringer LLP lawyer Portman.
“However,” he continued, “the exact meaning of a ‘separate actionable wrong’ is not well defined, and appears to be subject to a great deal of interpretation.”

This ambiguity can pose a serious risk to employers, warns Portman.

“In this particular case, the ‘separate actionable wrong’ appears to be related to the fact that [Gordon] was dismissed while there was an ongoing dispute and upcoming arbitration related to the evaluation of the sale price of his company,” he suggests.

Award

The judge handed down an incredible amount of $100,000 in punitive damages, in addition to the $68,000 Gordon received in lieu of notice. 

(Continued...)

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