Employee falsely accused of theft gets $2.1 million

Video showing worker taking money was basis for charges but video of putting it back was suppressed

A Niagara Falls, Ont., outlet of The Beer Store that fired a worker for allegedly stealing less than $200 must now pay him more than $2 million in damages.

The Ontario Court of Appeal upheld a jury award of $2.1 million to Douglas McNeil in May, who had sued his former employer, The Beer Store, for malicious prosecution. The case illustrates the court’s increasing comfort with large damage awards against employers who treat employees with disregard for their rights, and serves as a potent reminder that employers must proceed with caution when accusing employees of serious wrongdoing.

Store installed hidden video cameras

As part of an investigation into property loss at McNeil’s location, the Beer Store set up hidden cameras inside. The cameras caught McNeil removing $140 US on one occasion and $22 Cdn on another from the store’s cash register, either pocketing the cash or giving it to another employee. Other portions of video footage, however, showed McNeil placing corresponding amounts of cash into the till, consistent with his explanation and seeming to exonerate him.

The Beer Store went to the police with the incriminating portions of the tape, but failed to point out the exonerating portions, even after being specifically asked by the police whether any such evidence existed. Criminal charges were laid, resulting in McNeil’s conviction for theft. The Beer Store dismissed McNeil, for cause, consistent with the criminal conviction.

McNeil grieved the termination, and the other portions of videotape surfaced during the grievance arbitration process. McNeil used the new-found evidence to successfully appeal his criminal convictions.

Worker acquitted of theft charges sues for malicious prosecution

McNeil then sued The Beer Store for malicious prosecution. The Beer Store maintained a position that it acted reasonably in bringing the videotape evidence of McNeil taking money to the police. At trial, the jury had little trouble finding The Beer Store had no reasonable and probable grounds for initiating the criminal proceedings and it had acted with malice in doing so. In making its award, the jury was clearly cognizant of the tremendous negative impact the 13-year ordeal — between the original events and the trial — had on McNeil’s personal and professional life.

Worker awarded nearly $2.1 million in damages

In addition to nearly $1.3 million in damages for lost income, loss of care and companionship suffered by his wife and reimbursement for legal costs, the jury awarded McNeil $800,000 in aggravated and punitive damages, for a total award of $2.1 million. The Beer Store appealed the award, taking the position that the award was unduly high.

The Ontario Court of Appeal refused to tamper with the award. According to the court, “the jury viewed (The Beer Store) as a calculating and insensitive company that was prepared, for its own purposes, to see a man convicted of a crime it knew he did not commit” and the employer’s 13-year “charade” had “robbed McNeil of his reputation, his employment, his dignity and his self-respect.”

The Court of Appeal’s ruling serves as a reminder that employers must act fairly and in good faith when making an accusation of wrongdoing against an employee, and failure to do so can have costly consequences. Employers who act on incomplete evidence, pursue flimsy allegations or, worse, conceal evidence favourable to the employee, face the risk of significant sanctions in the courts.

For more information see:

McNeil v. Brewers Retail Inc., 2008 CarswellOnt 2838 (Ont. C.A.).

Peter Straszynski practices labour relations and employment law for Toronto law firm Torkin Manes, representing both private and public sector employers. He can be reached at (416) 777-5447 or [email protected]

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