Ontario Superior Court dismisses Allstate Canada’s counter-claim to wrongful dismissal lawsuit

An Ontario Superior Court judge has dismissed a counter claim by Allsate Canada, which had filed a lawsuit claiming defamation, after former employee Medha Joshi filed a suit against the company for wrongful dismissal.

Joshi — who held the position of agency manager at Allsate Canada — was terminated from her job on Oct. 9, 2018, for allegedly speaking with CBC News and exposing discriminatory sales practices by the province’s biggest insurance providers.

On Nov. 30, 2018, Joshi sued Allstate Canada for $600,000 over wrongful dismissal.

But Allstate launched a counterclaim, alleging defamation against Joshi, and sought $700,000 plus legal costs, for what the company claimed were “damages to Allstate’s reputation and goodwill.”

Madam Justice Jessica Kimmel dismissed Allstate Canada’s counter-suit on July 22, 2019.

In her decision, Kimmel said that when companies are alleged to have violated human rights, and when employee whistleblowers call attention to discriminatory policies and practices, public interest trumps the interests of private corporations.

Unwritten rules violated the ‘all-comers’ rule

Joshi had spoken out against unwritten rules at Allstate to make selling car insurance policies to drivers who live in Brampton, Ont., more difficult than in other Toronto neighbourhoods.

Joshi said those rules violated the “all-comers” rule set by the insurance regulator.

“I am troubled by the cavalier attitude that Allstate has adopted in relation to this cause of action,” Kimmel wrote in her decision.

Joshi, “…felt compelled to speak about what I have concluded is a matter of public interest. She would be one among a relatively small group of people who has knowledge, information and belief about the particular Allstate policy or practice in question,” Kimmel continued.

Joshi, who is being represented by Toronto employment lawyer Andrew Monkhouse, can now proceed with her wrongful dismissal suit, unimpeded by Allstate Canada’s counterclaim.

Monkhouse said the court’s decision expands whistleblower protections in the private sector, especially when it comes to human rights abuses in the public interest.

It also affirms that corporations cannot intimidate employees who have spoken out about wrong-doing by using outrageous counter-claims; and reporters, editors, TV and radio producers, and other journalists, may quote directly from a plaintiff’s statement of claim, critical to Canada’s open court system, Monkhouse added.

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