It is unusual for courts to award punitive or mental distress damages to terminated employees. Generally speaking, courts are reluctant to find that employers have an obligation upon termination beyond reasonable notice or pay in lieu of notice.
A recent Superior Court of Justice case, Altman v. Steve’s Music Store Inc., is an exception.
Shelley Altman had worked at Steve’s Music (“Steve’s”) for over 30 years when she became ill with lung cancer. After her diagnosis, Ms. Altman continued working at Steve’s on reduced hours, while also taking time off work for treatment as needed. Work was important to Ms. Altman and it helped her maintain a degree of normalcy during her cancer treatment.
Ten months into her diagnosis, Ms. Altman unexpectedly received a letter from Steve’s lawyer stating that she would be terminated if she did not return to work full time. Up to that point, Steve’s had been supportive, and Ms. Altman had no reason to believe that there were any concerns about her work hours. Despite Steve’s insistence, Ms. Altman was unable to return to work and her medical condition forced her to take a six month leave of absence.
At the end of her medical leave, Ms. Altman wrote to Steve’s stating that she was ready to return to work. The day before her expected return, Ms. Altman received a second letter from Steve’s terminating her employment. In its letter, Steve’s alleged that it had abolished her position and that it had no obligation to reinstate her. Steve’s gave Ms. Altman nothing in the way of severance or notice pay, and even purported to reduce her pay based on “absenteeism, late arrivals and early departures” for the period in which Ms. Altman was on approved modified duties owing to her cancer.
At trial, the Court found that Ms. Altman was entitled to 22 months notice pay given her 30 year history with the company. In addition, the Court ordered Steve’s to pay $35,000 in damages for bad faith termination, due to the distressing manner in which Steve’s had terminated her employment. The Court also ordered Steve’s to pay punitive damages of $20,000, as Steve’s conduct was reprehensible, high handed and deserving of denunciation, particularly in light of the false or misleading statements contained in Steve’s letters to Ms. Altman.