Precedent setting? Rare IME request granted in wrongful dismissal case

“It’s a very uncommon outcome.”

So says Laurie Jessome, partner at Cassels in Toronto, in discussing a recent wrongful dismissal case out of Ontario.

In a significant decision that could shape future claims, the Ontario Superior Court of Justice permitted an employer to require a former employee to undergo an independent medical examination (IME).

The ruling in Marshall v. Mercantile Exchange Corporation centered on Lyndon Marshall, a courier for 25 years, who was dismissed with 11 weeks’ notice and sought 26 months’ notice. Marshall claimed he was unable to seek new employment due to stress and depression caused by the termination — a contention his former employer disputed.

The ruling underscores the delicate balance between protecting an employee’s privacy and ensuring a fair litigation process — but IMEs in wrongful dismissal litigation are rare, says Jessome.

“It's not uncommon for there to be disputes during active employment about whether or not an employee is actually unable to work or needs the accommodations that they say they need, and sometimes that can lead to the employer requesting an independent medical evaluation. But during litigation, it's a very uncommon outcome. It almost never happens.”

Mari Maimets, employment lawyer at Hicks Morley, agrees that there are very few cases in the employment context where an IME has been sought in litigation.

“The vast majority of the case law is from the personal injury context or from the disability litigation context, where there’s an LTD claim, for example, that’s been denied. It’s very common in those cases for the plaintiff to be subjected to an IME.”

Balancing mental health claims with IMEs

Justice Markus Koehnen granted the IME under section 105(2) of the Courts of Justice Act, which permits such evaluations when a person’s mental or physical condition is in question.

Marshall argued that his mental health struggles post-dismissal — a common experience in such cases — rendered him unable to seek new employment for the entirety of the notice period he sought. The employer disputed this assertion and requested an IME to assess these claims.

Judges have acknowledged, without medical evidence, that the shock or upset that may come from losing your job will prevent you from jumping right back in and starting your job hunt right away, says Jessome, “and they'll give you some grace period without the employee being required to provide medical evidence.”

In the Ontario decision, the court underscored the importance of balance, acknowledging concerns over potential misuse of IMEs. Koehnen emphasized that the IME was warranted due to the nature of Marshall’s pleadings.

“The mental condition of [Marshall] has been put into question in this proceeding by [his] own choice,” the judge wrote.

“If someone takes a position as unusual as the plaintiff is taking, they should be prepared to subject themselves to an independent medical examination.”

Koehnen clarified that granting the employer’s request did not imply skepticism about Marshall’s claims: “None of that is to say that [he] is not suffering from a condition that prevents him from mitigating.”

The uniqueness of Marshall’s claim likely influenced the court’s decision to order an IME, says Jessome.

“The employee decided, for whatever reason, to plead that they did not expect to be able to search for work at all during their 26-month notice period… which is an extraordinary statement to put in the pleadings, because then obviously it opens you up to having that assertion tested.”

The decision was driven by the finding that it would be unfair to the employer to have Marshall assert that his mental health prevented him from mitigating his damages, says Maimets, “without allowing the [employer] an opportunity to test that. And the way they test that would be to have their independent doctor assess him.”

Limitations of disclosure in IMEs

An IME provides employers with detailed medical insights into an employee’s condition, but the context — litigation or workplace accommodation — determines the scope of information obtained.

Maimets says that in accommodation scenarios, the employer’s access is restricted to essential details about the employee’s limitations and their expected duration.

“The only things that an employer would be entitled to would be details of the limitations themselves and how long they’re expected to last, like what the prognosis is for improvement, because that informs the accommodation process.”

However, the dynamic shifts in litigation, where the employees’ medical records would be fair game, she says.

“Generally, any medical reports, any hospital records, any other medical records that relate to the condition that’s in question, the employer would have access to through the litigation process.

“And any questions that the healthcare practitioner would ask the employee when they're doing their examination would also be admissible in evidence. And so the amount of privacy to which plaintiffs in litigation are entitled is a lot lower than in the general like employment context.”

This access, says Maimets, is not always expected.

“It’s usually an unpleasant surprise to plaintiffs, how much scrutiny can be put on their personal medical information when that’s an issue in the litigation.”

Challenges to mental health evaluations

According to Jessome, the examination is narrowly tailored to the claims made by the former employee.

“They wouldn’t be entitled to have the IME weigh in on irrelevant or unrelated medical concerns that the employee may have had. But with respect to the core assertion… which is whether or not the [former employee’s] mental health prevented them from searching for new employment, they’d be entitled to any medical evidence that was relevant to that — and the independent medical examination would be focused on that question.”

The absence of medical evidence from Marshall’s side may have influenced the court’s willingness to grant the employer’s request, she says.

“It’s not completely explicit in the decision, but the suggestion here seems to be that there wasn’t any medical evidence on the record at all. And that left it open to [Marshall] to make this request,” says Jessome, who says it if some kind of doctor’s note or medical report would have changed the judge’s decision.

The case also highlights challenges associated with mental health evaluations compared to physical health assessments.

 “Mental health issues are a little harder, I think, for an independent medical examination. [To have]… a one-time visit with a physician that the person does not have a relationship with, it’s a little harder to expect that that will generate a meaningful assessment of their mental health for an accommodation analysis,” Laurie said.

“But that may be different in this case, where the question is much simpler: ‘Can they work at all?’”

Implications for mitigation efforts

Should the IME validate Marshall’s claim that he cannot work, it would relieve him of the obligation to mitigate damages within the applicable notice period. However, Jessome says that such findings do not guarantee the requested notice period.

“It would mean that… whatever the notice period is, that’s 26 months or less, the employee is essentially excused from their obligation to look for new work.”

Courts have penalized employees for insufficient mitigation efforts with minimal reductions to notice periods, she says.

“We’ve seen judges applying a percentage discount to the potential notice period on the basis that the employee didn’t mitigate, and we’ve seen that as low as 1% discount, which is effectively zero… So, it's a topic of discussion, but it's usually ancillary to the main issue of ‘What's the duration of the reasonable notice period and what kind of damages can the person recover during that period?’”

If the examination supports Marshall’s claim, it could shield him from penalties for failing to mitigate his damages, says Maimets.

“If the IME reveals that the employee has functional limitations that prevent them from securing or engaging in alternative employment, then that would likely impact on the court’s decision on damages because now it’s less likely that the court would penalize the [former employee] for not taking steps to get a new job if that medical evidence shows that they can’t work a new job.”

Possible precedent for independent medical examinations

While the decision sets a potential precedent, Jessome says that courts are unlikely to overuse IMEs in wrongful dismissal cases.

“Judges will be reluctant to overuse this, and the judge in this case was quite careful to say that one of the reasons that the IME was appropriate was the extraordinary length of the notice period and the employee’s unusual assertion that they couldn’t look for work for that entire notice period.

It’s a remedy that judges will be cautious about using, she says, because it’s invasive to send someone for a medical examination.

Ultimately, the case underscores the importance of evidence in litigation, particularly when mental health is at issue, says Jessome.

“If you’re going to make an assertion about your medical condition that’s so impactful to the nature of your claim, then you do need to be prepared to provide evidence. It’s a very basic part of the litigation process.”

The decision’s rarity in employment litigation could make it a precedent-setting case, both in Ontario and beyond, says Maimets.

“It is rare to see a defense medical being sought in employment-related litigation — the vast majority of cases are in the personal injury or the disability litigation context. And so this is a rare decision in that respect. And certainly it could set a precedent in Ontario, and it could also be persuasive to courts outside of Ontario, given how rare these kinds of cases are.”