CBC News | By Desmond Brown

An Ontario Superior Court judge has dismissed a counter claim by Allstate 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 Allstate Canada — told CBC News she was terminated from her job on Oct. 9, 2018, for allegedly 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.

Allstate Canada reviewing its options; may appeal decision

Responding to the court’s decision, the vice president of legal and general counsel for Allstate Insurance Company of Canada, expressed disappointment, while reiterating that Joshi’s allegations are “baseless.”

“We are disappointed in the outcome, but note that this is not a decision on the merits of Ms. Joshi’s baseless allegations,” Angie Morris wrote in an email to CBC Toronto.

“This is merely a preliminary procedural decision on how the litigation will proceed. Our legal counsel is reviewing the decision and we will decide whether to appeal in the next few weeks.”

Morris said regardless of whatever decision it takes in response to the ruling, “Allstate will continue to rigorously defend our good name and reputation as a champion of inclusion and diversity.”

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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