If your reputation is harmed in the course of a wrongful dismissal, are you owed compensation in relation to the damaged reputation?

In most cases, the answer will be no. If the loss of reputation is caused simply by the fact that you have been dismissed, usually no additional damages will be awarded beyond the ordinary wrongful dismissal damages for reasonable notice.

However, if your employer makes false allegations in the course of dismissal, then the answer may be different. If those false allegations damage your reputation, then additional damages can be awarded to compensate you for damage to reputation.

Loss of reputation in BC courts

A recent BC Court of Appeal decision gives a helpful guide if you are considering making a claim for damage to reputation. It will not be enough to simply show that a false allegation has been made. Rather, three conditions must be met in order to successfully make a claim for damaged reputation:

1. Your reputation is damaged by public knowledge of false allegations relating to the termination;
2. Your employer fails to take reasonable corrective steps and offers no reasonable excuse for such failure; and
3. the damage to your reputation has impaired your ability to find new employment.

Has your reputation been damaged?

Consider the example of an employer who fires an employee without notice and falsely accuses the employee of theft. On top of wrongful dismissal damages, the employee may seek damages based on damaged reputation. To be awarded damages for reputational harm, the employee would need to prove that:

1. The allegations of theft are publicly known, harming the employee’s reputation. If the employer privately accuses the employee of theft, then there will likely be no loss of reputation, and the loss of reputation claim will fail.
2. Without any reasonable excuse, the employer has not taken reasonable corrective steps. A reasonable corrective step might include the employer contacting everyone who knew about the false allegations and correcting the false statement.
3. The false theft allegations have made it more difficult for the employee to find new employment. For example, it would be helpful if there is some evidence that potential employers have decided not to hire the employee because of the false allegations.

There are relatively few wrongful dismissal cases where the employee is awarded additional damages for loss of reputation. But the court's comments in the case above provide employees (and their lawyers) with helpful clarity to determine what will need to be proven in the future in order to succeed with such a claim. And if it is apparent that those elements cannot be proven, employees can avoid throwing away time and money on a claim that cannot succeed.

It is important to determine at an early stage whether you have a potential claim for loss of reputation in addition to a wrongful dismissal claim. If there is a potential claim for loss of reputation, you and your lawyer will need to carefully consider at the outset of what steps must be taken to put together a strong case.

By Brendan Harvey

If you have been wrongfully dismissed or your employer has made statements that are damaging your reputation, we want to help you. Contact Brendan today to find out what you can do to protect your rights.