The Human Rights Tribunal of Ontario (the Tribunal) continues to work through its heavy case load with a few notable decisions issued over the summer concerning the contravention of settlements, COVID-19 vaccinations and the enforceability of a full and final release.
Former employee’s breach of confidentiality clause leads to repayment of settlement funds
In L.C.C. v. M.M., 2023 HRTO 1138 (CanLII), the Tribunal decided that the Respondent, M.M. (a former employee of L.C.C.) had breached the confidentiality and non-disparagement terms outlined in a settlement agreement. As a result, the Tribunal ordered M.M. to repay the settlement amounts that they had previously received.
The Tribunal allows applicants to file a claim concerning a respondent’s contravention of settlement terms. The procedure for a contravention of settlement application is found at Rule 24 of the Tribunal’s Rules of Procedure.
In this case, M.M. had previously filed an application with the Tribunal alleging its former employer had engaged in discriminatory conduct. The parties, all of whom were represented by counsel throughout, engaged in mediation and reached a settlement. The resulting Minutes of Settlement contained confidentiality and mutual non-disparagement, as well as the consequences for breaching these clauses:
Confidentiality: The Applicant may disclose the terms of these Minutes of Settlement to [their] immediate family, legal and financial advisors, on the condition that they also agree to maintain strict confidentiality of these Minutes of Settlement. Upon inquiry by any person about the resolution of the Application or conclusion of the Applicant’s employment with [the applicant corporation], the Applicant shall simply state that all matters have been resolved. The Applicant will make no mention of, or allude in any way whatsoever to, the receipt of money or the amount of money received from [the applicant corporation] in this Settlement.
Mutual Non-Disparagement: The parties agree that the purpose of this Settlement is to resolve any issues the Applicant has with the Respondents on a confidential basis and without any disparagement of the parties. Accordingly, the parties agree to refrain from making any oral, written or electronic communications about each other that are untrue, defamatory, disparaging, or derogatory, or acting in any manner that would be likely to damage the opposite party’s reputation in the eyes of customers, regulators, the general public, or employees, unless required by law. This non-disparagement includes but is not limited to any electronic communications through social media….
Breach: The Applicant agrees that if [they breach] any of the obligations under this Settlement, and in particular the confidentiality obligation set out in paragraph 7 and the non-disparagement obligation in paragraph 8, above, [they] will be required to repay to the [corporate] Respondent the Settlement Payment paid to [them] under paragraph 2 of these Minutes of Settlement as liquidated damages, and will be responsible for any additional damages incurred by the [corporate] Respondent.
Understanding: The Applicant hereby declares that she has had an opportunity to obtain independent legal advice regarding the matters addressed in these Minutes of Settlement or has freely chosen not to do so, and that she fully understands her obligations under these Minutes of Settlement. She voluntarily accepts the terms and conditions set out in these Minutes of Settlement and agrees to finally settle all claims or potential claims, as described above, that she has or may have in future against the Respondents.
[Emphasis added]
Shortly after the mediation, M.M. posted to social media: “To all those inquiring, I have come to a resolution in my Human Rights Complaint against [the applicant corporation] and [the individual applicant] for sex discrimination.”
After finding the social media post, the employer asked M.M. to remove it. M.M. did not respond. Instead, M.M. revised the post to read, “To all those inquiring, all matters have been resolved in my Human Rights Complaint against [the applicant corporation] and [the individual applicant] for sex discrimination.”
The Tribunal ruled that M.M. had breached the confidentiality clause. The confidentiality clause contained a limited exception which permitted M.M. to state “all matters have been resolved,” to questions concerning their complaint against the applicant and the conclusion of their employment. The Tribunal held that a plain language reading of the confidentiality clause only allowed disclosure to those who explicitly made inquiries to the respondent.
Not only was the social media post publicly accessible but it included references outside the scope of the permitted language in the confidentiality clause. Specifically, the social media post indicated “sex discrimination” and the names of both the applicant corporation and the individual applicant (the respondents in the original Application). These additions to a public post would, to a reasonable and objective viewer, “carry a real potential of serious reputational damage” (para. 34). The Tribunal affirmed the importance of confidentiality provisions in resolving disputes and if these provisions were ignored by applications, it would seriously impact the ability to settle human rights applications (para. 54).
Further, the Tribunal ruled the social media post also breached the non-disparagement clause. The plain meaning and intention of the Minutes of Settlement with regards to this clause was to avoid the reputational damage. The reference to “sex” discrimination was considered a “serious and particularly prejudicial type of allegation” (para. 37). Accordingly, it was reasonable for a member of the public to believe that reputational damage could result from the publicizing of such allegations. The Tribunal also noted that the non-disparagement clause explicitly contemplated the possibility of these allegations being publicized given that the Minutes of Settlement expressly prohibited any communications through social media.
The Tribunal ruled that M.M. breached its duty to perform the Minutes of Settlement in good faith. It also held that M.M. had a duty to act in a manner consistent with the corporate and individual applicants’ “legitimate interests in minimizing reputational damage, maintaining confidentiality, and achieving finality in settlement” (para. 55).
In ordering the remedy, the Tribunal relied on the breach clause outlined in the Minutes of Settlement, which provided for the return of the settlement amount by M.M. in the event of a breach. The Tribunal further held that the breach clause was not improperly punitive. In particular, the breach clause was not unconscionable as both parties had been represented by legal counsel at the time the Minutes of Settlement was negotiated and signed, nor was it unfair to require forfeiture of the settlement amount in the event of a breach. Re-payment to the applicant of the liquidated payment would not provide any additional benefits to the organizational applicant. As the Tribunal noted, it simply put them back in the position that they occupied before paying the amount to the respondent.
Takeaway for employers: This decision demonstrates that the Tribunal takes matters involving the breach of settlement terms seriously and, in particular, underscores that a breach of confidentiality and non-disparagement clauses in settlement terms will carry real legal consequences.
Tribunal rules that concepts of autonomy and individual choice did not meet definition of creed under the Human Rights Code
In the latest round of mandatory COVID-19 vaccination decisions, the Tribunal in Oulds v. Bluewater Health, 2023 HRTO 1134 (CanLII)held that the respondent employer had not breached the Ontario Human Rights Code (Code) when it terminated the applicant’s employment for failing to comply with its mandatory workplace vaccine policy (the Policy).
The applicant alleged the respondent had discriminated against her based on her creed belief and association with a person identified by a protected ground. She also alleged reprisal after the respondent terminated her employment for failing to become vaccinated against COVID-19.
The Tribunal dismissed the application on the basis it did not identify any specific acts of discrimination within the meaning of the Code.
With regard to the allegation of reprisal, the Tribunal ruled that the employer’s actions did not meet the definition of reprisal under the Code. The applicant only claimed her decision to be unvaccinated against COVID-19 was due to a Code-protected ground after the employer told her that her employment was scheduled to be terminated for failure to follow the Policy and only one day prior to the actual termination date.
Additionally, the applicant identified her sincerely held creed beliefs to include the following:
- “The Covid-19 vaccine alters in some fashion all, or some of a person’s genetic material, Code, make up, of all or part of their body, or bodily systems” (para. 14); and
- “The right to bodily autonomy, being central and integral to the individual; as a spiritual person, the belief that the Creator made us perfect, and not to alter one’s body unnecessarily; they cannot take any medication that alters or instructs DNA, RNA, or molecular structure; as a spiritual person, their belief that the Creator will protect them; their belief that an individual’s private life, medication, treatments, and infections they may have, should be kept as private as possible; and that faith can be flexible and is not strictly regulated or tenented [sic]” (para. 15).
The Tribunal held the concepts of autonomy and individual choice did not meet the definition of creed. To that end, the Tribunal noted that the applicant’s creed “…lacks an overarching systemic component.” For example, “[w]hile the applicant refers to a ‘Creator’ which is evocative of the being’s believed influence over life, the submissions do not specifically address the question of human existence, nor contemplate life and death.” Moreover, the applicant did not provide any evidence “…about other life-guiding beliefs arrived at through dialogue with the Creator, or about other ‘alterations’ to the body that they similarly reject on the same grounds” (para 18). Accordingly, the applicant’s failure to provide these details meant she did not have a Code-recognized creed belief. Rather, she held “a singular belief around the lack of efficacy of the Covid-19 vaccine and some perception that the vaccine could alter DNA, and the need for autonomy to make this specific vaccine choice” (para. 19).
Takeaway for employers: Beliefs centered around exercising “bodily autonomy,” including the personal choice not to vaccinate, even if the one holds a sincerely held belief that it was required by God or a Creator, may not fall within the meaning of creed under the Code or have success at the Tribunal.
Signed release bars employee’s subsequent human rights application
Finally, in Kamal v. TRACTEL Swing Stage Limited, 2023 HRTO 1388 (CanLII), the Tribunal dismissed an application as an abuse of process on the basis that the applicant had freely entered into a binding full and final release with respect to her claims under the Code.
Upon termination of the applicant’s employment in March of 2018, the applicant’s former employer, provided her a termination letter and release. The applicant subsequently signed the release which provided:
In consideration of the package outlined in this letter, you DO FULLY RELEASE AND DISCHARGE Tractel Ltd. and all affiliated or related corporations and all other affiliated legal entities, their officers, directors, agents, employees, successors and assigns (hereinafter collectively referred to as TRACTEL), from all actions, causes of action, suits, debts, demands, and all other liabilities of any kind existing now or which are not now known or anticipated but which arise in the future out of, or in any way related to, your employment with the TRACTEL or the permanent layoff of my employment with the TRACTEL including, but not limited to, any entitlement you may have under common law, or pursuant to the Employment Standards Act of Ontario as amended.
IT IS FURTHER UNDERSTOOD AND AGREED that this releases any claims you may have against the TRACTEL under the Workplace Safety Insurance Act, as amended and the Ontario Human Rights Code, as amended and that any such claims, if made, would be in bad faith.
…
YOU HAVE READ OVER THE ABOVE RELEASE and have had adequate opportunity to obtain such legal or other advice in regard to it as you consider necessary and understand it as a full and final release of all claims you may have against the TRACTEL arising out of or, in connection with your employment and the permanent layoff of your employment.
…
Approximately four months after the termination of the applicant’s employment, the applicant filed an application with the Tribunal, alleging sexual harassment by the individual respondent, and further alleging the applicant had reported the sexual harassment to their employer who failed to investigate the matter prior to terminating her employment.
The Tribunal relied on established jurisprudence which states that, absent compelling reasons, the doctrine of abuse of process, including the principle of finality of legal claims, readily applies to settlement agreements and releases and considers them to be legally binding and final.
The applicant suggested there were compelling reasons to set aside the release because it was “unfair” and failed to provide her consideration.
In response to her claims, the Tribunal held that there was sufficient consideration in exchange for her signing the release. In this case, the employer offered the applicant four weeks of paid notice (her entitlement under the Ontario Employment Standards Act, 2000, was only three weeks of notice) in exchange for signing the release.
Additionally, it was open to the applicant to seek legal advice regarding any greater termination payments she may have been entitled to or to fully understand any rights she was abandoning by signing the release. However, despite the fact the release indicated the applicant had adequate opportunity to obtain legal advice and the applicant was expressly told during the termination meeting to seek counsel prior to signing the release, the applicant chose not to seek counsel. The Tribunal specifically noted the employer’s efforts, both in person at the termination meeting and in writing in the termination letter, to “ensure the applicant’s rights and interested [sic] were safeguarded” (para. 38).
Third, the literal and ordinary meaning of the release terms expressly released the respondents from claims by the applicant under the Code.
Further, the applicant’s claims that she “needed income” was not compelling reasons to set aside the release. The Tribunal held that normal financial pressures resulting from being terminated from employment did not constitute a situation similar to signing under duress. In the decision, the Tribunal reiterated the principles of economic duress upheld by the Ontario Court of Appeal in Taber v. Paris Boutique & Bridal Inc., 2010 ONCA 157 (CanLII):
However, not all pressure, economic or otherwise, can constitute duress sufficient to carry these legal consequences. It must have two elements: it must be pressure that the law regards as illegitimate; and it must be applied to such a degree as to amount to “a coercion of the will” of the party relying on the concept.
The Tribunal ruled there was no evidence of illegal pressure or coercion by the employer on the applicant to sign the release.
Lastly, for similar reasons, the Tribunal gave no effect to the applicant’s claim that she was “not of sound mind” when she signed the release, as she advanced no evidence of her state of mind at the relevant time.
Takeaway for employers: This decision is an example of why it is good practice for employers to remind employees to seek legal counsel prior to signing a release and give them reasonable time to do so following their dismissal. Additionally, the decision demonstrates that employees must provide a strong evidentiary basis for any claims of duress in order to reverse the effect of a signed release that restricts their rights to advance an application under the Code.
For more information on this topic, please contact the author, Fatimah Khan.
