Allstate whistleblower facing $700K lawsuit says insurance giant trying to silence her

A former Allstate Insurance Canada employee who launched a wrongful dismissal suit and had publicly criticized a practice she called discriminatory is defending herself against an Allstate counterclaim that could cost her more than $700,000 in damages.

Mehda Joshi claims Allstate wanted to deny insurance to visible minority drivers in Brampton, Ont.

Mehda Joshi, a former Allstate agency manager, says the company is trying to prevent her from speaking to the media. (Michael Cole/CBC)

A former Allstate Insurance Canada employee who launched a wrongful dismissal suit and had publicly criticized a practice she called discriminatory is defending herself against an Allstate counterclaim that could cost her more than $700,000 in damages.

The legal battle, which will head to a Toronto court on Thursday, could set a dangerous precedent and discourage private-sector employees from speaking out against their employers, said Andrew Monkhouse, the lawyer representing Mehdi Joshi in a wrongful dismissal suit against Allstate.

If the Allstate lawsuit succeeds, "people are going to be less willing to go out and comment to the media about concerns and potential inappropriate activity," said Monkhouse.

"There's a public interest in having ex-employees be able to talk about what happened at their past work."

Joshi claims she was fired last year after confronting her managers over a plan to stop selling insurance to drivers who live in Brampton, which has some of the highest premiums in Ontario.

She argued the plan was a thinly veiled attempt to deny auto insurance to the city's large visible-minority population.

"It's just wrong. There is no other word for it," she told CBC Toronto in late 2018 after filing the wrongful dismissal suit. The U.S.-based insurance giant has since filed a counterclaim, alleging Joshi caused "damages to Allstate's reputation and goodwill."

Joshi and her lawyer are seeking to have the counterclaim dismissed and to proceed with their original wrongful dismissal lawsuit, which is seeking some $600,000 in damages.

"We do hope that if we're successful, it will give a clear message to all employees that if they have concerns of impropriety at their workplace, that they're able to voice those concerns," Monkhouse said.

Joshi declined to comment directly to CBC Toronto and Allstate did not respond to multiple interview requests.

Joshi's lawyer Andrew Monkhouse said private sector workers may be discouraged from speaking out if the court rules in Allstate's favour. (Michael Cole/CBC)

Allstate accused of trying to silence critics

Joshi argues Allstate's counterclaim is an attempt to silence her and discourage whistleblowing around the issue of discrimination.

In her latest court submission, Joshi said the company has tried to cause a "chilling effect" that would stop her from speaking to the media.

"It is very stressful to have your past employer sue you for so much money for speaking out about concerns you have regarding their practices," Joshi writes in the submission.

The submission also claims the company has used similar practices of "strategic litigation" to silence other critics, though it does not provide specific examples.

Fewer 'protections' for private-sector workers

According to an employment law expert, Joshi's claim against Allstate will be weaker than typical whistleblowing cases, which usually happen within the public sector.

That's because private-sector employees do not have the same protections as public servants, who are legally protected when speaking out about a wider range of misconduct at their places of work.

"In the private sector, there aren't those protections," said Joseph Cohen-Lyons, a Toronto-based employment lawyer.

"An employee is only protected if they're whistleblowing about a criminal action."

Cohen-Lyons said disgruntled private-sector workers rarely approach him seeking help, in part because those workers may be fearful of losing their jobs due to a lack of whistleblower protections.