Union Ordered to pay $500,000 for Making Defamatory Statements About Employer
September 13, 2022
September 13, 2022
Previously printed in the LexisNexis Labour Notes Newsletter.
In Civeo Corporation v. Unite Here, Loc. 40 (Employer Defamation Grievance),  B.C.C.A.A.A. 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 understanding which set out conditions related to work at the Employer’s operations in Kitimat, B.C. (the “LOU”). The LOU contained a number of terms, including with respect to the hiring of qualified workers from the local area, including Indigenous workers. In 2021, the Union indicated it was not happy with the terms of the LOU and sought to renegotiate them. The Employer was not open to that. In response, the Union published the following statement, which formed the basis for the employer grievance:
Civeo’s broken promises to First Nations people:
- Low wages.
- Decrease in hiring of Indigenous workers over the past two years.
This means that Civeo has not showed commitment to improving the living standards of Indigenous workers and their families. (together, the “Impugned Statements”)
The Union raised a preliminary objection regarding the arbitrability of the defamation claim. That objection was overruled by Arbitrator Glass in an award dated December 15, 2021.
The merits of the employer grievance and the appropriate measure of damages were addressed by the arbitrator in  B.C.C.A.A.A. No. 39.
Arbitrator Glass held that the Impugned Statements were indeed defamatory. The Union’s conduct, taken as a whole, was in breach of its duty of good faith in the administration, application and performance of the collective agreement. There was no factual basis for the Impugned Statements and the implication was that Civeo’s conduct was analogous or comparable to the historically unethical and negative treatment of Indigenous people.
In defending the claim, the Union raised two alternative defences – the defence of justification and the defence of fair comment. Arbitrator Glass rejected the justification argument on the basis that the Union did not prove that the Employer had broken any of its wage or hiring commitments under the LOU. The arbitrator rejected the fair comment argument because the Impugned Statements clearly amounted to an assertion of facts rather than commentary and were not based on any proven facts.
After concluding that the Union defamed the Employer without a proper defence, Arbitrator Glass turned to the matter of damages. After considering the factors relevant to claims of defamation and awards 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 Impugned Statements.
This case serves as a useful reminder that labour arbitrators have the jurisdiction to hear claims of defamation and make awards of punitive damages and this applies with respect to employers and unions alike.
Arbitrators will consider the obligation of parties to a collective bargaining relationship to act in good faith in the administration, application and performance of the collective agreement. Engaging in tortious behaviour to try and achieve collective bargaining goals which are unattainable in lawful bargaining or, for that matter, through lawful dispute resolution processes under the collective agreement will amount to a breach of the duty of good faith and may form an independent basis for an award of punitive damages.
In addition and as this case illustrates, awards of damages made by arbitrators can be very substantial.
While every effort has been made to ensure accuracy in this article, you are urged to seek specific advice on matters of concern and not to rely solely on what is contained herein. The article is for general information purposes only and does not constitute legal advice.