Mont-Tremblant city council voted to fire Michel Ledoux in December 2011, after he used a hidden camera and microphone to make recordings at the station and at private union meetings during contract negotiations.
But a panel of three judges sided with Ledoux on Monday, saying that his actions, while improper, were explained in part by the "psychological harassment" he faced at work from his own officers.
"He had a fake bomb [at] his door. Many, many flyers or posters, saying Ledoux is this, Ledoux is bad," said Thomas Villeneuve, Ledoux's lawyer. "It was personal attacks."
The court decision says firing Ledoux was the "ultimate sanction" and tantamount to a "professional death sentence," and says he should have instead been suspended without pay for four months.
The court has ordered the city to repay all of Ledoux's salary and benefits from April 2012 onwards.
A spokesperson for the City of Mont-Tremblant said the city has received the court judgement, but must consult with its lawyers before commenting.
'Clean up that mess in Tremblant'
Ledoux joined the department in Mont-Tremblant as inspector responsible for police operations in October 2005 after 30 years with Montreal Police. When he was promoted to chief in January 2007, he began trying to bring more "rigour" to the force, according to the court decision.
"They gave him the mission…to clean up that mess in Tremblant," said Villeneuve. "It was a party in Tremblant from the police officers who were doing exactly what they wanted to do."
Villeneuve contends that those reforms and later, Ledoux's role as management in union negotiations, made him a target.
The court documents describe flyers comparing Ledoux to a member of the Ku Klux Klan, or associating his name with mental illness and sexually-transmitted infections.
Another picture depicted Ledoux and assistant director of operations Michel Gagné as baboons, engaging in sexual intercourse, Villeneuve said.
The harassment also included hanging an effigy of a police officer in front of the station and routinely blocking access to Ledoux's office and parking spot.
The court ruled the harassment was abnormal and went beyond the scope of normal union pressure tactics.
In February 2011, Ledoux bought an alarm clock with a hidden camera and a key chain with a microphone, which he used on multiple occasions to record officers, both at the Mont-Tremblant police station and at city hall, where union members were taking part in contract negotiations.
Ledoux testified he obtained authorization from city officials to carry out the surveillance. The city's general manager at the time testified she only agreed if signs were also posted informing people they were under surveillance.
The court called Ledoux's decision to record union meetings, "a serious mistake."
"Without a doubt, [Ledoux] went entirely too far," the decision reads. "The exchanges held during these union meetings were strictly confidential and should have remained so."
However, it ruled that lack of clarity around whether or not the city authorized the surveillance, and the harassment against Ledoux, were mitigating factors.
$2.5M civil suit
Ledoux had been charged on five criminal counts connected to the surveillance shortly after he was fired, but a jury acquitted him on all counts in May 2014.
An appeal of that verdict has yet to be heard in court.
Ledoux is also seeking $2.5 million in damages from the city in a lawsuit that will be in court in September, Villeneuve said.