A court-ordered compensation award of approximately CRC 328.5 million (around USD 650,000) is remarkable not only because of its amount, but because it raises an important question: what happened for a Costa Rican labor court to reach such a significant decision?
The ruling against the Municipality of San Carlos, a local government in northern Costa Rica, has brought workplace harassment back into the national spotlight. Beyond the compensation awarded to a former employee, the case serves as a reminder that an employer’s decisions may be subject to judicial scrutiny when a worker claims to have been subjected to workplace harassment.
Although the events took place within a public institution, the lessons from this decision extend well beyond the public sector. Any employer—whether a private company, nonprofit organization or public entity—can face similar legal challenges when workplace conflicts are not handled appropriately.
What happened in the Municipality of San Carlos case?
The case centers on Dixie Amores Saborío, who served for several years as Head of the Planning and Strategic Development Department of the Municipality of San Carlos.
During her tenure, she oversaw strategic projects aimed at the municipality’s development, including the Bajura de Pital aqueduct project, one of the region’s most significant public infrastructure initiatives.
Following a change in the municipal administration in 2022, however, the employment relationship began to deteriorate.
According to the facts established by the court, the employee became the subject of a series of administrative investigations and disciplinary proceedings initiated by the municipal administration. Over time, these actions accumulated and evolved into an increasingly complex labor dispute.
During the trial, the testimony of the municipality’s former comptroller also became a significant element of the evidence. He stated that the then mayor had expressed an intention to dismiss the employee from the beginning of the administration. The court later assessed this testimony alongside the remaining documentary and testimonial evidence presented during the proceedings.
Amid this context, the Municipality dismissed the employee without severance pay, alleging job abandonment.
That decision was later reviewed by the labor courts, which ordered her reinstatement after finding the dismissal unlawful and awarded her the wages lost during the period of separation.
Rather than bringing the conflict to an end, her reinstatement was followed by additional administrative actions, which also became part of the court’s analysis.
After reviewing the documentary evidence, witness testimony and expert opinions, the labor court concluded that both the Municipality of San Carlos and the then mayor were jointly liable for the harm suffered by the employee. They were ordered to pay approximately CRC 328.5 million, primarily as compensation for moral damages, in addition to court costs.
Although the decision may still be subject to appeal, it is already regarded as one of Costa Rica’s most significant workplace harassment cases because of both the amount awarded and the legal reasoning adopted by the court.
Yet the most significant aspect of this ruling is not the compensation itself.
Many of the actions examined by the court—such as opening administrative investigations, initiating disciplinary proceedings or even dismissing an employee where legal grounds exist—are powers that employers are generally entitled to exercise.
So why did the court conclude that these actions amounted to workplace harassment?
The answer lies in how those powers were exercised and in the broader context in which they occurred.
Why did the court conclude that workplace harassment had occurred?
The San Carlos ruling highlights an important principle: workplace harassment is not always characterized by insults, threats or other obvious forms of misconduct. In many cases, it results from a series of actions that may appear legitimate when viewed individually, but that reveal a pattern of harassment when considered as a whole.
That was precisely the approach adopted by the court. Rather than evaluating each action taken by the Municipality of San Carlos in isolation, the judges examined the overall context in which those actions occurred and the impact they had on the employee.
Can an employer investigate an employee?
Yes.
Employers have the legal authority to investigate potential misconduct, request information, initiate disciplinary proceedings and impose sanctions whenever there are legitimate grounds for doing so.
These powers are an essential part of managing any organization and, by themselves, do not constitute workplace harassment.
In the San Carlos case, the court did not question the Municipality’s right to conduct investigations or initiate disciplinary procedures. Instead, it examined whether those powers were exercised for legitimate management purposes or whether they had become part of a broader pattern of conduct directed at a single employee.
When can legitimate managerial authority become workplace harassment?
The issue is not the existence of an investigation, a disciplinary process or even a dismissal.
The concern arises when those actions cease to be objective and proportionate and instead become repetitive, excessive or are used to pressure, isolate or force an employee out of the organization.
According to the court, this was the key issue in the San Carlos case.
Rather than focusing on a single disciplinary measure, the judges considered the succession of administrative investigations, disciplinary proceedings, the employee’s dismissal, her subsequent reinstatement and the additional actions taken after her return to work.
Viewed together, these events formed the factual context that led the court to conclude that the employee had been subjected to workplace harassment.
Why was the overall context so important?
One of the most significant aspects of the decision is that the court did not limit its analysis to determining whether each individual action was legally permissible.
Instead, it assessed whether the cumulative effect of those actions reflected a pattern of conduct incompatible with the employee’s dignity and rights.
The testimony of the Municipality’s former comptroller also played an important role in that analysis. His statements regarding the alleged intention to dismiss the employee from the outset of the administration were not treated as conclusive evidence on their own. Rather, they were evaluated alongside the documentary evidence and witness testimony presented during the trial to better understand the context in which the events unfolded.
In other words, the court examined not only what the employer did, but also how, when and for what purpose those managerial powers were exercised.
The San Carlos case illustrates that courts may look beyond the legality of individual management decisions and instead assess whether, taken together, they amount to conduct that undermines an employee’s dignity and creates an abusive working environment.
What can employers do to prevent workplace harassment?
The San Carlos case demonstrates that preventing workplace harassment does not require employers to give up their authority to supervise employees, conduct investigations or apply disciplinary measures. Rather, it requires those powers to be exercised fairly, consistently and with respect for employees’ rights.
In Costa Rica, this preventive approach has gained greater importance following the country’s ratification of the International Labour Organization’s Violence and Harassment Convention, 2019 (Convention No. 190), which encourages employers to promote workplaces free from violence and harassment.
For employers, prevention is not simply a matter of legal compliance. It is also an effective way to reduce legal exposure, strengthen workplace culture and foster healthier employment relationships.
Establish clear workplace policies
Organizations should have written policies that define workplace harassment, explain the reporting process and describe how complaints will be investigated and resolved.
These policies should be communicated regularly to all employees and supported by ongoing training.
Exercise managerial authority objectively
The San Carlos case illustrates that investigations and disciplinary measures are legitimate management tools when they are based on objective facts and applied consistently.
Before initiating disciplinary action, employers should ask whether the decision is supported by evidence, whether similar situations have been treated consistently and whether the proposed measure is proportionate to the circumstances.
Maintain thorough documentation
Employment decisions should be properly documented.
Performance evaluations, disciplinary actions, internal investigations and management decisions should be supported by accurate and objective records.
Good documentation not only promotes transparency but may also become essential evidence if a dispute reaches the courts.
Train managers and supervisors
Many workplace conflicts arise not from intentional misconduct but from poor communication, inconsistent management practices or inadequate leadership skills.
Regular training helps managers recognize potential risks, handle conflicts appropriately and exercise their authority in a professional and respectful manner.
Respond promptly to complaints
Ignoring or minimizing complaints can allow workplace conflicts to escalate.
Employers should have procedures in place to receive complaints confidentially, investigate them impartially and take appropriate measures while the investigation is ongoing.
Early intervention often prevents disputes from developing into costly litigation.
Prevention is the best strategy
The San Carlos case demonstrates that workplace harassment claims can have significant financial, operational and reputational consequences.
Beyond the outcome of any future appeals, the decision sends a clear message: courts increasingly examine not only whether employers acted within their legal authority, but also how those powers were exercised and whether their conduct respected the dignity of employees.
Implementing preventive policies, documenting employment decisions and managing workplace conflicts objectively are not simply legal safeguards—they are sound business practices that help organizations build stronger and more resilient workplaces.
How ERP Lawyers can assist
ERP Lawyers advises local and international businesses on employment law compliance, workplace investigations, disciplinary procedures, internal policies and strategies to prevent workplace harassment in Costa Rica.
Whether your organization is establishing operations in Costa Rica or strengthening its existing employment practices, proactive legal guidance can help reduce risk, improve compliance and promote a respectful working environment.
📩 Contact ERP Lawyers today to learn how we can help your organization strengthen its workplace compliance and employment practices in Costa Rica.
