Employer has duty to protect employee’s reputation in circumstances surrounding termination

23 Jun

An employer has a duty to provide a safe and harassment free workplace, but this is different than a duty to protect an employee’s reputation. The assertion of a duty to protect reputation is of great concern to employers given how often employees who are targeted on the internet by “outsiders” turn to their employers for help. On May 29th the Federal Court of Appeal held that an employer breached a duty to protect its employee’s reputation, but also made clear that the duty arose only out of the well-established duty to exercise good faith in terminating employment – the “Wallace duty.” Justice Sharlow explained:

As I understand the adjudicator’s reasons, he did not conclude that PWGSC as Mr. Tipple’s employer had a free-standing duty to protect his reputation. Rather, he found that the law imposed on PWGSC a duty of good faith when terminating Mr. Tipple’s employment. When PWGSC decided to terminate Mr. Tipple’s employment in the midst of press reports impugning his integrity on the basis of information leaked from PWGSC which senior officials of PWGSC knew to be false, the duty of good faith included the duty to take reasonable steps to ensure that the termination did not cause undue and unjustified harm to Mr. Tipple’s reputation. In my view, the adjudicator’s conclusion is well within the scope of the Wallace principle, and is reasonable. I conclude that the judge erred in setting aside the award of $250,000 for loss of reputation.

The facts are worth a close read and detailed analysis, but I’ll simplify here and say that employers who terminate an employee who is embroiled in public controversy without asserting cause for reasons related to the controversy ought to beware of a positive duty to protect the employee’s reputation.

Tipple v. Canada (Attorney General), 2012 FCA 158 (CanLII).

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