The Globe & Mail terminated the employment of long-time correspondent Jan Wong
(the “Grievor”) in or about late 2007. Her union, the Communications Energy and Paperworkers
Union of Canada, Local 87-M (the “Union”) filed grievances on her behalf
challenging the employer’s denial of sick leave and claiming that her discharge
was without just cause. In the course of
an arbitration hearing on the grievances, the parties engaged in
negotiations. The Grievor was
represented by the Union’s counsel, but had also retained her own lawyer, who
provided her with individual advice during the negotiation process. After passing various versions of a
Memorandum of Agreement (the “MOA”) back and forth, the parties arrived at a
settlement of the grievances. As part of
the MOA, the parties agreed to a time-limited non-disparagement clause, as well
as other provisions limiting disclosure of the terms of settlement: the Grievor was permitted to disclose the
employer’s acknowledgement that she had been ill and unable to attend work, but
neither party was “to disclose the terms of settlement” aside from that
fact. The MOA also dealt with the
consequences of a breach:
Should the Grievor breach the obligations set out in
paragraph 5 and 6 [dealing with non-disclosure], Arbitrator Davie shall remain
seized to determine if there is a breach and, if she so finds, the Grievor will
have an obligation to pay back to the Employer all payments paid to the Grievor
under paragraph 3.
The Globe & Mail was aware during negotiations that the
Grievor planned on writing a book about the situation, so the non-disclosure
language was a key element of the MOA from the employer’s perspective. In 2012, the Grievor self-published a book,
which included references to the fact that the employer had made a sizeable
payment to her, although she did not indicate the actual amount she
received. The employer brought the
matter back before Arbitrator Davie to obtain an order that the Grievor repay
the moneys. The Grievor offered
testimony that she thought she was only prohibited from disclosing the “precise
terms” of the settlement, and that she was unaware that she could not even
disclose the fact of a payment. She had
a lawyer review her book prior to publication for any libel concerns, but never
asked the Union’s counsel or her own lawyer whether the content might violate
the non-disclosure provision of the MOA.
At the arbitration hearing, the Union argued that the Grievor’s breach of the MOA was, at most, technical, and that the repayment provision should not be enforced in any event as it was punitive and unconscionable. Arbitrator Davie rejected both of these arguments, citing jurisprudence from arbitrators, the Ontario Labour Relations Board and human rights adjudicators that stood for the proposition that freely negotiated settlements should be upheld in the interests of labour relations and to not discourage other parties from reaching compromise. Moreover, non-disclosure provisions “are also a recognition of the fact that parties settle grievances for a variety of reasons which may be unrelated to liability or wrongdoing” (para. 26). The Arbitrator also rejected the suggestion that the MOA was unenforceable, as the Grievor had experienced legal representation, her own lawyer, and was sophisticated enough to participate in the negotiation of the MOA. Importantly, the Arbitrator found (at para. 48):
At the hearing the grievor testified she misunderstood
the scope of her nondisclosure obligations under the MOA. If that is the case, responsibility for that
rests with her. In the circumstances of
this case it would be inappropriate to set aside a comprehensive settlement,
negotiated over a lengthy period of time, which in clear, unambiguous and
objective language sets out what the nondisclosure obligation entails merely
because of the grievor’s subjective opinion and what she “thought” her
nondisclosure obligations to be.
In the result, the Arbitrator found that the disclosure of a
payment was in violation of the non-disclosure provision and enforced the terms
of settlement, ordering the Grievor to repay the monies she had received from
the Globe & Mail. [Globe and Mail, a Division of CTV Globemedia
Publishing Inc. v. Communications, Energy and Paperworkers Union of Canada,
Local 87-M, Southern Ontario Newspaper Guild (Breach of Memorandum Grievance)
(2013), 233 L.A.C. (4th) 265 (Davie). Note: given that the Grievor brought an application for judicial review in relation to a preliminary decision of Arbitrator Davie already, it's entirely possible that the final decision will also go before the courts. Stay tuned...]
In the decision in Knipfel v. The Regional Municipality of York
(“Knipfel”),
however, another employer’s attempt to rely on the terms of a negotiated
settlement were not so successful. In Knipfel, the employee was a paramedic
whose employment was terminated in August 2012.
His union filed a grievance on his behalf, and the employee also made an
Application to the Human Rights Tribunal of Ontario (the “HRTO” or the "Tribunal"). Ultimately, the employee (the “Applicant”),
the Municipality, and the Union negotiated Minutes of Settlement (“MOS”) resolving
both the grievance and his Application to the HRTO. As part of the MOS, the employer agreed to
provide a neutral employment reference to the Applicant.
The MOS also provided that its terms constituted “full and final
settlement of any existing, planned or possible complaint(s) against, including
any outstanding or contemplated Human Rights Tribunal application, the Employer
or its representatives.” The Applicant
also signed a Release, which provided that the payment contemplated by the
settlement was in consideration of “full and final settlement of any existing,
planned or possible complaint(s) against [the employer] under the Ontario Human Rights Code up to the date of
execution of the Release, arising out of or in respect to his employment.” The Arbitrator who had been scheduled to hear
the grievance was to “remain seized” of any issues arising from the MOS.
Subsequently, the Applicant brought a new Application to the HRTO,
alleging discrimination in the form of a negative employment reference he had
received from the Municipality. The
employer argued that the Application should be dismissed as the Applicant had
signed a Release, and the Application was therefore an abuse of the Tribunal’s
process. The employer
also argued that the parties’ agreement that the Arbitrator “remain seized” (i.e.,
was to be the sole adjudicator of any issues arising under the MOS) meant that
the HRTO was without jurisdiction to hear the Application.
Vice-Chair Sheri Price dismissed both arguments. First, it was clear on the face of the
Release that it was only to cover complaints that related to events “up to the
date of execution of the Release”, and not any alleged future breaches of the
Human Rights Code. It would be contrary
to public policy to allow an individual to waive or contract out of his or her
rights prospectively, so the Release could not have this effect. With respect to the argument that the
Arbitrator had exclusive jurisdiction, the HRTO pointed out that the MOS
related not only to the Applicant’s discharge grievance, but also resolved his
Application to the Tribunal. Given that
his allegations amounted to a claim that a prior settlement of a Human Rights
Code complaint had been breached, section 45.9 of the Code granted the Tribunal
jurisdiction to hear and decide that issue.
Once jurisdiction is granted to the HRTO, parties to a private agreement
cannot deprive the Tribunal of its statutory jurisdiction. Even if the issue of the alleged violation of
the MOS had been brought before the Arbitrator, the HRTO would still have
concurrent jurisdiction under the Code.
In the result, the employer’s request to dismiss the Application
was denied and the Application was permitted to proceed through the HRTO
process.
The lesson to be learned?
When crafting settlement documentation, it is generally advisable to get
legal advice, particularly where large sums of money may change hands, the
underlying dispute needs to be kept confidential, and/or a human rights issue is
involved. Obviously, any non-disclosure
language should be paired with a clause that identifies the consequences of a
breach. However, it’s also wise to
consider whether to require full repayment, or some lesser sanction for a
violation of the agreement. There have
been cases where arbitrators have reduced the amount of repayment on the basis
that the clause in question amounted to an unfair penalty. On the other hand, ‘bundling’ the settlement of a grievance
together with the resolution of an HRTO Application may have an unforeseen downside. Before entering into a global settlement,
discuss your options with counsel.
If you have a question about this post or have a labour
relations issue you’d like to discuss, please don’t hesitate to contact Lance Ceaser.
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