Workplace Investigations: When Failure to Inquire and Respond Becomes Part of the Wrong

Hedrick v. Johnston Meier Insurance Agencies Ltd., 2026 BCSC 1250, is principally a wrongful dismissal decision dealing with frustration of contract. It also offers an important lesson for workplace investigations.

The unusual feature of the case is not simply that an employer failed to respond adequately to an employee complaint. The employer’s failure to understand and address a known workplace hazard became part of the causal chain leading to the employee’s psychological disability. That same disability was later relied upon by the employer as the basis for terminating the employment relationship on the ground of frustration.

The frustration defence failed.

The case therefore demonstrates a consequence of inadequate workplace fact gathering that extends well beyond procedural unfairness. An employer’s failure to make the necessary inquiries and respond to a serious workplace complaint may contribute to the subsequent harm and may eventually affect substantive legal rights and defences.

The Facts

Amber Hedrick began working for Johnston Meier Insurance Agencies Ltd. in 2014 as an insurance producer. She ultimately worked for the company for approximately seven and a half years.

During her employment, a representative of one of the employer’s significant clients began stalking her.

The conduct continued over a period of years. The stalker waited for Hedrick in the workplace parking lot, followed her while she was driving and, as the conduct escalated, eventually appeared at her home, where she lived with her child. (Clausework)

Hedrick advised her manager about the problem relatively early. Some workplace safeguards were initially used. By the summer of 2021, however, the conduct had become considerably more frequent and serious. In August 2021, Hedrick sent her manager a detailed email explaining the escalation and seeking guidance. The manager responded sympathetically and indicated that he would develop a plan. The Court found that meaningful protective steps did not follow. (Canadian Lawyer)

The difficulties between Hedrick and her manager also increased.

Her request for an alternative working arrangement was not meaningfully explored. Her monthly draw was reduced from $10,000 to $7,000 without advance notice and was later adjusted to $8,300. When her deteriorating mental health caused her to seek vacation time, her manager told her to drop her “attitude.” (Canadian HR Reporter)

Hedrick was ultimately referred to the employer’s human resources manager, who connected her with WorkSafeBC. On October 4, 2021, Hedrick reached the point at which she could no longer continue working and went on medical leave. She began receiving temporary wage-loss benefits from WorkSafeBC. (McMillan)

The stalking did not end merely because Hedrick had stopped working.

On August 24, 2022, WorkSafeBC determined that she had suffered permanent psychological injuries, including post-traumatic stress disorder and major depressive disorder. Significantly, WorkSafeBC attributed her condition not simply to the stalker’s behaviour but also, in part, to the conduct of her manager. (McMillan)

WorkSafeBC imposed permanent restrictions preventing Hedrick from working with Johnston Meier, her former manager and the individual who had stalked her. (McMillan)

Johnston Meier then relied upon those restrictions.

On September 16, 2022, it terminated Hedrick’s employment on the basis that the employment contract had been frustrated. Its position was essentially that she was permanently incapable of returning to the employment relationship and that continued performance of the contract had therefore become impossible. (McMillan)

The Court rejected that defence.

The critical reason was that frustration requires the supervening event to arise without fault on the part of the party relying upon it. The Court found that the employer’s conduct had itself contributed to Hedrick’s injuries and her resulting inability to return to the workplace. (McMillan)

That factual finding provides the foundation for the workplace investigation lesson.

A Complaint from a Third Party Can Still Be a Workplace Complaint

The alleged wrongdoer in Hedrick was not another employee. He was associated with a client. That distinction did not make the safety issue external to the workplace.

Workplace investigations are often considered in the familiar setting of one employee complaining about another employee. That is too restrictive.

A workplace hazard may arise from the conduct of a:

client;

customer;

patient;

contractor;

supplier; or

other third party.

The relevant question is not merely whether the employer has disciplinary authority over the alleged wrongdoer.

It is whether the employer knows, or reasonably ought to know, that the conduct creates a risk to an employee in connection with the workplace.

Once that occurs, the employer must determine what is happening, assess the risk and decide what reasonable measures are required.

In Hedrick, the Court relied specifically upon the supervisor’s positive obligation under s. 23 of British Columbia’s Workers Compensation Act to protect the health and safety of workers under his direct supervision. The Court found that reasonable steps were not taken to address the known hazard. (McMillan)

Investigation Is Not Limited to Determining Whether an Allegation Is True

A conventional workplace investigation commonly asks:

What happened?

Who said what?

Which evidence should be accepted?

Was the allegation substantiated?

A complaint involving an ongoing danger requires an additional question:

What must be done now?

Those inquiries can proceed simultaneously.

An employer faced with allegations of stalking, threats, violence or another continuing safety risk may not be able to wait until a conventional investigation has reached a final conclusion before taking protective action.

The employer first requires enough reliable information to understand the risk.

That may require determining:

what conduct has occurred;

how frequently it has occurred;

whether it is escalating;

how the alleged wrongdoer obtains access to the employee;

whether the workplace itself facilitates that access;

whether there is a risk associated with arriving at or leaving work;

whether temporary separation measures are available;

whether remote or alternative work is possible; and

whether the relationship with the customer or client must itself be reconsidered.

This is where the investigation dimension of Hedrick becomes important.

The Court did not prescribe a formal investigative procedure. Nor did it hold that every workplace safety complaint must be referred to an external investigator.

The defect was more fundamental.

Management had been given information revealing an escalating danger, yet failed to make the inquiry and take the action necessary to deal meaningfully with it.

Listening Is Not the Same as Investigating

A manager may listen sympathetically to a complaint.

The manager may say that the matter is serious.

The manager may promise to develop a plan.

None of those things necessarily constitutes an adequate response.

A meaningful workplace process ordinarily requires movement from:

receipt of the complaint;

to gathering the relevant facts;

to assessing the risk;

to deciding upon an appropriate response;

to implementing that response;

and finally to following up to determine whether it worked.

The August 2021 communication in Hedrick illustrates the point particularly well.

Hedrick gave her manager a detailed account of the escalating conduct and asked for guidance. He indicated that he would develop a plan. The Court found that meaningful protective action did not follow. (Clausework)

There is an obvious investigation lesson.

An employer cannot regard the receipt and acknowledgment of a complaint as the completion of the process.

The purpose of obtaining information is to enable an informed decision about what should happen next.

The Complaint Eventually Included Management’s Own Conduct

The case developed another important feature.

Hedrick’s difficulty ultimately concerned not only the stalker’s behaviour but also the manner in which her manager had responded to her circumstances. Once that occurs, the structure of the inquiry must change. A manager who was originally responsible for receiving and addressing a complaint may later become part of the factual controversy. At that point the manager is no longer simply the employer’s decision-maker. The manager may be a witness.

The employee may contend that the manager’s own actions or omissions contributed to the problem. That creates an obvious need for independent consideration of management’s conduct.

The practical principle is straightforward:

Where an employee complains about the manner in which a manager handled an earlier complaint, the employer should investigate that second issue independently rather than merely accepting the manager’s explanation of his or her own conduct.

In Hedrick, the eventual WorkSafeBC findings are striking in this respect. Hedrick’s permanent psychological injuries were attributed in part to the conduct of the stalker and in part to the conduct of her manager. (McMillan)

The manager’s response had therefore ceased to be merely background evidence.

It had become part of the alleged cause of the employee’s injury.

The Investigation Failure Became Causative Conduct

This is the distinctive feature of the decision.

Most discussions of inadequate workplace investigations focus upon the reliability or fairness of the ultimate finding.

Was the respondent interviewed?

Were witnesses overlooked?

Was contradictory evidence examined?

Was potentially exculpatory evidence considered?

Was the investigator impartial?

Those remain essential questions.

Hedrick identifies another potential consequence.

The failure to make appropriate inquiries and act upon the information obtained may itself change what happens next.

The sequence may become:

complaint → inadequate inquiry → inadequate response → continuation or escalation of the hazard → employee injury → disability → inability to return to work.

At that point, the defect in the investigation process is no longer merely procedural.

It has potentially become causative.

That is what happened in Hedrick.

The employer’s failure to respond adequately to the known safety problem contributed to the employee’s deteriorating psychological condition. WorkSafeBC ultimately imposed permanent restrictions preventing her return to the employer, manager and stalker. The employer then attempted to rely upon that inability to return as frustration of contract. (McMillan)

The Court held that it could not do so because its own conduct had contributed to the supervening circumstances.

The employer’s earlier failure therefore had an unexpected legal consequence.

It helped destroy a substantive defence that might otherwise have ended the employment relationship without reasonable notice.

A Different Principle from Wilsher

Hedrick should be distinguished from the recent investigation principle illustrated by Wilsher v. Olympic Wholesale.

Wilsher concerns the quality of fact finding where serious misconduct is alleged against an employee.

The important point there is the need to examine potentially exculpatory evidence. An investigation should not be designed simply to assemble evidence supporting an accusation. Evidence capable of explaining, contradicting or undermining the allegation must also be explored.

The two cases therefore address different investigative failures.

Wilsher concerns an investigation that must fairly explore both inculpatory and exculpatory evidence.

Hedrick concerns the failure to obtain and act upon sufficient information to understand and address an ongoing workplace risk.

The cases complement one another.

The purpose of a workplace investigation is not simply to produce a finding.

It is to provide a reliable factual foundation from which the employer can make an informed and lawful decision.

A Further Inquiry Was Required Before Relying on Frustration

There is also an investigation lesson at the other end of the chronology.

Before relying upon an employee’s disability as frustration of contract, an employer should understand why continued performance has become impossible.

In Hedrick, WorkSafeBC did not simply determine that the employee was medically incapable of doing any work.

The permanent restrictions were specifically connected to:

Johnston Meier;

her former manager;

the stalker; and

her former workplace. (McMillan)

Those restrictions should immediately focus attention upon the particular employment environment.

The relevant questions therefore included:

Why can this employee not return to this employer?

Is she incapable of working generally, or is the restriction workplace-specific?

Can the conditions preventing a return be altered?

Can alternative arrangements be made?

What role, if any, did management conduct play in producing the restriction?

A determination that an employee cannot return to a particular workplace is not necessarily the end of the inquiry.

It may be the beginning of it.

That point was particularly important in Hedrick because the answer to the question “Why can she not return?” ultimately defeated the frustration defence.

Not a General Common-Law Duty to Investigate

The limits of the decision should also be made clear.

Hedrick should not be cited for the proposition that the British Columbia Supreme Court created a new, universal common-law cause of action for failure to conduct a workplace investigation.

It did not.

The legal analysis rested principally upon frustration of contract, the employer’s contribution to the supervening circumstances and the supervisor’s statutory health and safety responsibilities.

The investigation significance arises from the facts and causal reasoning.

The employer had information identifying a serious workplace hazard.

It failed to obtain and act upon the information necessary to respond reasonably.

That omission contributed to the circumstances upon which it later attempted to rely.

This narrower statement is also the more useful one.

The Absence of Aggravated Damages

There is an interesting final feature.

Despite the Court’s finding that employer conduct contributed to Hedrick’s psychological injuries and inability to return to work, aggravated and punitive damages were refused.

The Court regarded the conduct as insensitive, unprofessional or improper, but not sufficiently malicious or high-handed to justify the additional awards. (Canadian Lawyer)

That outcome reinforces an important point about workplace investigations.

A deficient investigation does not automatically result in aggravated damages.

Its legal consequences depend upon the nature of the wrong and what the failure actually caused.

In Hedrick, the principal consequence was not an aggravated damages award.

It was that the employer’s conduct became causally connected to the employee’s inability to return to work and thereby defeated the employer’s frustration defence.

That may ultimately have been the more significant consequence.

Conclusion

Hedrick v. Johnston Meier Insurance Agencies Ltd. adds an important dimension to workplace investigation law.

The familiar investigation case asks whether the employer reached a reliable conclusion through a fair process.

Hedrick presents a different question:

What happens when the employer fails to inquire adequately into an ongoing workplace danger and that failure contributes to the harm that follows?

The answer may extend far beyond criticism of the investigation.

A known risk may continue.

The employee’s health may deteriorate.

The employee may become unable to return to the workplace.

And the employer’s earlier failure to understand and address the problem may subsequently affect the legal rights arising from the employment relationship.

The central lesson is therefore not simply that employers should investigate complaints.

It is that the investigation must serve its real purpose:

to understand the facts sufficiently to make a reasonable and informed decision about what must happen next.

In Hedrick, the failure to do so became part of the wrong.

Meta description:

Hedrick v. Johnston Meier shows how an employer’s failure to inquire into and respond to a serious workplace safety complaint can contribute to employee disability and defeat a later frustration defence.