Disability Pension Reductions due to Merlo Davidson Settlement Compensation - December 5, 2022

December 5, 2022

The Honourable Lawrence MacAulay, P.C., M.P.
Minister of Veterans Affairs and Associate Minister of National Defence
66 Slater St., 16th Floor
Ottawa, Ontario K1A 0P4
    
Re: Disability Pension Reductions due to Merlo Davidson Settlement Compensation
    
Dear Minister MacAulay,

I am writing to share my findings further to a complaint we received from the Chair of the RCMP Veteran Women’s Council on behalf of some claimants to the Merlo Davidson Class Action Settlement. Regrettably, after a lengthy review I must advise that I have found unfairness in the manner in which the Department is reducing, or clawing back, compensation amounts from VAC disability pensions. To rectify what in essence constitutes a further injustice to these brave women who have suffered as a result of culpable conduct by their counterparts during their employment with the RCMP, I am making two recommendations for your consideration. 

In May 2017 the Federal Court (Citation: 2017 FC 533) approved the settlement of the Merlo Davidson Class Action to “resolve the claims of…class members who experienced…gender and/or sexual orientation based harassment and discrimination…while working in the RCMP during the class period.” The monetary terms of the settlement were to “compensate Class Members who suffered injury as a consequence of that Harassment”. Six levels (Annex A) of compensation were set: “[e]ach level sets out a non-exhaustive list of culpable conduct and effect on the victim. The multiple levels recognize that there are many different forms of gender and sexual orientation based harassment and discrimination, and each will have a unique impact on the victim.” Over 2300 women have received compensation under the settlement. 

Some of these claimants are also in receipt of a disability pension under the Pension Act. While I understand that VAC is obligated under section 25 of the Pension Act to reduce a disability pension by damages, or compensation, awarded for the same disability, it would appear that this requirement may have been unfairly applied to some of the Merlo Davidson claimants. We are aware that there is at least one Level 1 or 2 claimant whose psychological/psychiatric disability pension is being reduced as a result of having received Merlo Davidson compensation. However, the compensation table (Annex A) for these two levels specifically notes that “ongoing psychological damage” and “psychiatric condition” or “psychiatric affliction” are not effects related to the culpable conduct described: Level 1 and 2 compensation clearly does not compensate for any psychological or psychiatric disability. Therefore, claimants in receipt of a disability pension for psychological or psychiatric disability should not see their disability pensions reduced by amounts received under Level 1 or 2 of the Merlo Davidson agreement.

Over the last three years, we have queried the Department several times about these disability pension reductions. To date we have not received a clear rationale as to how VAC has assessed its obligation under section 25 of the Pension Act with respect to the Merlo Davidson claimants, in particular those who were awarded compensation at Level 1 or Level 2.

For the other compensation levels, it is unfortunate that the wording of the settlement agreement does not clearly distinguish what percentage of the compensation amounts provided in the compensation table pertain to the effects of the culpable conduct. With this lack of clarity, it is understandably difficult to determine by how much a Level 3 to 6 claimant’s related disability pension ought to be reduced. While Levels 3 to 6 may include compensation for ongoing mental health problems, they also compensate for the culpable conduct itself and the severity of the discrimination and harassment that the victim endured. Such compensation is not compensation for disability. Therefore, if disability pension reductions are being made in respect of Merlo Davidson claimants for ongoing mental health issues, the claimant pensioners must be provided with a clearly articulated and publicly available methodology for said reduction. 

We recognize that class action settlement agreements since Merlo Davidson have been much improved with respect to this ambiguity around double compensation. Heyder Beattie and the LGBT Purge settlement agreements were better worded and better implemented. But the women who have been victims of gender- and sexual orientation-based harassment and discrimination while employed by the RCMP are not helped by these improvements. We are given to understand that these women say they were encouraged to come forward to make a claim on the settlement and were assured throughout the process that their VAC benefits would not be affected. We have also heard that claimants feel re-victimized by what they see as a lack of transparency about the negative impact on their disability pensions. In effect they have been re-traumatized by a confusing and stressful process that has resulted in reductions to their disability pensions.

Not having received a clear rationale from the Department on this matter, I am unable to ascertain that the Department is correctly discharging its responsibility under section 25 of the Pension Act in respect of its former RCMP clients who are also recipients of compensation under Levels 3 to 6 of the Merlo Davidson settlement agreement. Additionally, I am uncertain that these former women members of the RCMP who have been victims of harassment and discrimination have been provided with sufficiently clear and accurate information about the reductions. I therefore have no choice but to find that compensation under Merlo Davidson Levels 1 and 2 is being unfairly reduced from claimants’ disability pensions for psychological or psychiatric conditions. I also find that the Department has not been sufficiently transparent about how it is determining that compensation approved at Levels 3 to 6 comprises compensation for disability pensions under the Pension Act and in what amount. 

In order to rectify this unfairness in the administration of psychological or psychiatric disability pensions for Merlo Davidson claimants, I am making two recommendations for your consideration: 

Recommendation One: that VAC immediately cease disability pension reductions for Merlo Davidson Levels 1 and 2 claimants and issue corrective payments to the women from whom pension amounts have been clawed back. 

Recommendation Two: that VAC publish its methodology for determining whether and in what amount Merlo Davidson compensation comprises compensation for a pensioned disability under the Pension Act, and barring same, immediately cease disability pension reductions for Merlo Davidson claimants at Levels 3 to 6 and issue corrective payments to the women from whom pension amounts have been clawed back. 

I trust that you are equally concerned about the well-being of these former members of the RCMP and would agree that they have truly suffered enough. Where the Merlo Davidson settlement agreement is so ambiguous with respect to identifying what percentage of its compensation could be construed as for ongoing injury, I would offer that the Department may wish to adopt a liberal construction and interpretation of this matter under section 2 of the Pension Act in favour of the class action claimants. 

Yours sincerely,

Colonel (Ret’d) Nishika Jardine
Veterans Ombud

c.c.:      Mr. Paul Ledwell
Deputy Minister, Veterans Affairs Canada

Attachment:
Annex A: Merlo Davidson Compensation Levels[1]

Merlo Davidson compensation levels

Level	Culpable conduct includes but is not limited to:	Effect on victim:
Level 1 -- $10,000	Sexualized comments  Sexualized jokes  Inappropriate questioning regarding the complainant’s personal life  Exhibitionism  Bullying causing psychological harm, anxiety  Mockery by various means  Communication of a sexual or romantic nature	Anxiety, nightmares, occasional panic attacks  Rage, feeling of humiliation  Loss of self esteem  Feelings of degradation and discomfort  Note: No substance abuse or work interruption, no ongoing psychological damage
Level 2 -- $35,000	Kissing  Touching with a sexual purpose or intention  Simulating sexual intercourse or masturbation  Physical aggression causing harm  Mockery by various means  Bullying causing psychological harm, anxiety  Persistent communication of a sexual or romantic nature Exposure to pornography	Physical wound  Temporary incapacity forcing medical attention  Post-traumatic stress, not severe  Auto condemnation, feeling culpable  Loss of confidence in others  Anxiety, nightmares, occasional panic attacks  Rage, feeling of humiliation  Mild depression  Minor work disruption  Note: NO PSYCHIATRIC CONDITION, no troubling substance abuse, no permanent psychiatric affliction
Level 3 -- $70,000	Gender-based putdowns  Persistent kissing or touching with sexual intention  Exposure of genitals to complainant  Sexual advances  Constant intimidation in front of others  Intimidation by using rank  Mockery with intent to degrade  Incessant communications [sic] of a romantic or sexual nature  Persistent exposure to pornography Reprisals related to work environment	Severe stress affecting the complainant’s health  Auto-condemnation  Loss of confidence in others  Severe anxiety  Frequent panic attacks  Severe nightmares  Sexual dysfunction  Mild drug or alcohol abuse  Wound making permanent mark  Temporary work disruption  Loss of self-esteem  Loss of desire to communicate feelings of love or desire
Level 4 -- $100,000	Persistent or ongoing gender-based putdowns  Touching of complainant’s genitalia Forcing oneself on victim physically  Physical aggression causing wound  Exposure to violent pornography  Harassment towards vulnerable complainant	Severe stress affecting the complainant’s health  Post-traumatic stress  Diminished professional status or reputations  Drug or alcohol abuse  Absenteeism  Suicidal [sic] ideation Diminished physical [sic] health or well-being
Level 5 -- $150,000	Persistent intimidation, bullying, aggressions  Acts to denigrate and humiliate in front of others  Diminishing value of Member to the RCMP by assigning menial tasks below the Member’s abilities  Acts meant to affect working conditions or career development  Acts causing interpersonal problems  Acts intended to cause emotional stress  Using rank to denigrate  Repeated Sexual advances  Harassment towards complainant with moderate vulnerability  Forcing complainant to perform non-penetrative sex acts	Severe stress affecting the complainant’s health  Post-traumatic stress  Obsessional tendencies  Substance abuse  Problems with interpersonal relationships  Suicidal thoughts Wound leaving a permanent mark  Feeling culpable, auto-condemnation  Loss of confidence and self-esteem Loss of desire to communicate feelings of love or desire  Some work disruption
Level 6 -- $220,000	Continuous intimidation, bullying, aggressions  Forcing complainant to engage in penetrative sex acts  Harassment towards complainant with heightened vulnerability  Acts to isolate from other members  Acts to denigrate and affect career development  Sexual advances  Using rank to denigrate Acts meant to cause emotional stress	Severe stress affecting the complainant’s health  Severe post-traumatic stress  Disorganized behaviour  Personality problems  Suicidal thoughts or attempts  Sexual dysfunction  Chronic psychiatric condition  Substance abuse  Inability to work

 

[1]Factors listed above are verbatim from Appendix 6 of the settlement agreement. Appendix 6 also includes a note cautioning that the “composition of […] levels is meant to facilitate the preparation of the interview and to assist in determining the proper level of compensation. It is not meant to present a list of factors that must be found to exist in a given case to decide on the level of compensation.”