It is every employee’s natural inclination to boast about reaching a favourable settlement with his/her former employer, particularly in the context of a wrongful dismissal. Employees want to publicize the terms of settlement as an affirmation that they “stuck it to the man”. Employment lawyers know that employees cannot simply advertise the monetary payment received from the employer because settlements in employment and labour law matters routinely include a confidentiality provision that restrains the employee from disclosing any aspect of the terms of settlement.
Confidentiality provisions are standard in every settlement between employers and employees. Employers want to limit the number of individuals who will have knowledge of any of the terms of settlement. The provisions generally permit the employee to share the terms of settlement with family members, legal counsel, financial advisors and/or government agencies.
Lawyers are ethically bound to hold all client information acquired in the course of a professional relationship in the strictest of confidence and therefore familiar with the constraints imposed by confidentiality clauses in settlement agreements. The lawyer representing the employee must take care to emphasize the nature of the obligations being imposed upon the employee as a result of the settlement.
In the age of social media, lawyers are concerned that an indiscrete posting about a settlement on Twitter, Snapchat or Instagram will be communicated to a wide audience that may come to the employer’s attention. The disclosure of any part of the terms of the agreement place an employee’s settlement at risk.
In the case of Wong v. The Globe and Mail Inc., 2014 ONSC 6372 (CanLII) (Div. Ct.), Ms. Wong’s union entered into a Memorandum of Agreement to settle a grievance against Globe filed on behalf of Ms. Wong, which included a significant monetary settlement. The Memorandum also included a confidentiality provision and a non-disparagement clause. Four years after the settlement, Ms. Wong sought to publish a book about her experiences as a journalist. The book included twenty-three references to the settlement of her grievance against the Globe and Mail, including that fact that she had received: “a big pile of money”; “a big fat cheque”; and ended up with “a swollen bank account”. An arbitrator decided that Ms. Wong breached the confidentiality provision, the employer had lost the benefit of an essential term of the settlement and therefore required Ms. Wong to repay the money paid to her by the employer. Ms. Wong’s applied to the Divisional Court of for a judicial review of the arbitrator’s decision. The Divisional Court found the arbitrator’s decision to be both reasonable and correct. The Court also ordered Ms. Wong to pay legal costs totalling $30,000.00.
In the face of a confidentiality provision in a settlement agreement, if questioned, an employee may state that the dispute has been resolved and/or indicate the parties have reached an agreement but nothing more. A settlement is private with the terms remaining as between the parties.
I you wish to discuss this, or any matter related to employment law you may contact Chris Clermont at 613-225-0037 extension 17 or email Chris at firstname.lastname@example.org.