In Correia v. Canac Kitchens, 2008 ONCA 506, the Ontario Court of Appeal expanded the tort of negligent investigation to include such claims by employees if private investigators conduct negligent workplace investigations.
The employee in this case, Joao Correia, was a sixty-two year old long-time employee of Canac Kitchens. In 2002, Canac hired a private investigation firm to conduct undercover work in its plant because it suspected theft and other criminal activities at its facilities. Due to a number of errors, the private investigation firm and the employer confused the plaintiff with the actual suspect who was 40 years younger. Mr. Correia was thus wrongly identified as one of several employees engaged in theft and drug dealing at the Canac plant.
Mr. Correia was accused of theft and fired for cause. He was then taken to another room where police were waiting and arrested for theft and taken into custody briefly. He was, however, innocent. Four months later the charges were dropped and Canac offered to reinstate Mr. Correia. Unfortunately he had suffered serious psychological injury as a result of the wrongful allegations and was unable to return to work.
Mr. Correia sued for wrongful dismissal and negligent investigation, amongst other claims. The private investigation firm moved successfully for summary judgment to strike the claim of negligent investigation. The motions judge rule that there was no duty of care owed to Mr. Correia by the private investigation firm.
Mr. Correia appealed the decision of the motions judge. The Court of Appeal allowed the appeal in part. In particular it set aside the dismissal of the claim for negligent investigation against the private investigation firm, noting, “the fact that private investigation firms perform public policing functions but with limited oversight or clear lines of redress to those injured by activities strongly favours extending tort liability.”
In determining that a duty of care could exist between the private investigation firm and Mr. Correia, the Court of Appeal found that, where an individual is the targeted subject of a criminal investigation, both proximity and the reasonable foreseeability that harm could result to the employee exist if that investigation is carried out negligently. However, the unanimous court declined to further extend tort liability under this head to employers, citing the Supreme Court decision in Wallace as specifically excluding this possibility. Therefore, investigators may be liable to employees for negligent investigation. If employers negligently investigate employees for wrongdoing, then this may be a breach of an employer’s obligation of good faith and fair dealing and damages may be awarded on that basis.