Union accused B.C. employer of breaking promises to First Nations
A union that accused its employer of breaking promises to First Nations, in a push to pry open a mid-contract wage deal, crossed from advocacy into defamation, an arbitrator has found.
That added up to damages totalling $400,000.
The Supreme Court of British Columbia released its decision on May 29, 2026, with Madam Justice Morellato presiding. The judicial review was brought by Unite Here, Local 40 against Civeo Corporation, operator of a workforce lodge in Kitimat, B.C.
An arbitrator had ordered the union to pay Civeo $400,000 in general damages for reputational harm and $100,000 in punitive damages. The court upheld liability and the general damages but sent the punitive award back to be reassessed.
Dispute over wages
The dispute began at the Kitimat Sitka Lodge, where the union and Civeo signed a letter of understanding in 2018. That agreement gave priority to hiring qualified local workers, including regional Indigenous people, and set annual wage adjustments tied to inflation and capped at three percent.
By the summer of 2021, the union pressed Civeo to reopen the deal on wages.
Civeo declined and was not required under the agreement to renegotiate mid-term, a point both sides accepted. Unable to lawfully strike during the contract, the union took its case to the public, posting statements online about low wages, a decline in Indigenous hiring, and what it called Civeo's broken promises to First Nations people.
Union alleges broken promises
Civeo filed a grievance, and arbitrator Nicholas Glass found the statements were false and defamatory. He then went further, ruling that the union's conduct amounted to "extreme bad faith in the administration, application and performance of the collective agreement."
Both sides to a collective agreement, he reasoned, owe each other a duty of good faith.
The arbitrator found the campaign was designed to pressure Civeo back to the table by other means. One online post declared, "We deserve a fair, living standard for all workers, and more hiring of First Nations people now!" Yet the union's lead organizer acknowledged under cross-examination that Civeo had not broken its collective agreement promises.
Witnesses for Civeo, including Indigenous members of management, testified that the phrase "broken promises" struck at a painful history; the company said Indigenous workers were 47 percent of the lodge's workforce. Trevor Gladue, Civeo's director of Indigenous strategic initiative, described the damage to its standing with First Nations, testifying, "We are now on defence because of this. It has a reverberation which is hard to rebound from."
$400,000 in damages
On judicial review of the board's decision, the union argued the dispute never belonged before an arbitrator, and that the damages were flawed. Justice Morellato rejected the first point, holding that jurisdiction had already been settled and the defamation claim was properly heard through the grievance process, not the courts.
On the damages, she agreed with the union in part. The arbitrator, and the board panel that reviewed him, had relied on the same factors to justify both awards, which she found amounted to double counting that the law on punitive damages does not allow.
Morellato did not erase the punitive award, leaving intact the finding that the union's bad-faith tactics could justify punishment, but remitted the figure for reassessment.
The union did not retract. Asked why, its organizer testified, "We don't believe we were wrong, so we haven't retracted."
The $400,000 in general damages stands; any punitive penalty now returns to the labour board's reconsideration panel to weigh again in light of the court's reasons.
