Canadian HR Reporter

Canadian HR RepoRteR January 26, 2015 22 FeAtures 2015 ONTARIO LAWYER'S PHONE BOOK THE MOST COMPLETE DIRECTORY OF ONTARIO LAWYERS, LAW FIRMS, JUDGES AND COURTS With more than 1,400 pages of essential legal references, Ontario Lawyer's Phone Book is your best connection to legal services in Ontario. Subscribers can depend on the credibility, accuracy and currency of this directory year after year. More detail and a wider scope of legal contact information for Ontario than any other source: • Over 27,000 lawyers listed • Over 9,000 law firms and corporate offices listed • Fax and telephone numbers, e-mail addresses, office locations and postal codes CANADA LAW BOOK ® This text is the first of its kind – designed to provide a comprehensive introduction to the topic and analysis of different policy approaches to green energy. Directed towards environmental law practitioners and those involved in the development of green energy policies, its perspective is Canadian yet, as the international shift towards renewable energy intensifies, our role on the global stage is illuminated. Canadian Green Energy Law and Policy launches at a time when a thorough knowledge of the subject matter is critical. This book offers essential practical guidance on the issues involved in getting these projects organized, approved and built, providing you with a comprehensive overview of the legal and policy frameworks involved – providing context from both sides of the inherent arguments. NEW PUBLICATION CANADIAN GREEN ENERGY LAW AND POLICY FRED D. CASS SPEARHEADING RESPONSIBLE ENERGY POLICY DEVELOPMENT ORDER # 804528 $120 Hardcover approx. 425 pages March 2012 978-0-88804-528-7 AVAILABLE RISK-FREE FOR 30 DAYS Order online at www.carswell.com Call Toll-Free: 1-800-387-5164 In Toronto: 416-609-3800 Shipping and handling are extra. Price subject to change without notice and subject to applicable taxes. Visit carswell.com or call 1.800.387.5164 for a 30-day no-risk evaluation Perfectbound Published December each year On subscription $77 One time purchase $80 L88804-677 Multiple copy discounts available. Plus applicable taxes and shipping & handling. (prices subject to change without notice) EMpLOyMEnt LAw Breaching confidentiality of settlement agreements can be costly By Marty Rabinovitch and Joanne Schiffer c onfidentiality provi- sions have crept into the spotlight recently, as evidenced when former Globe and Mail writer Jan wong was ordered to repay her settlement after breaching a confidentiality agreement with the newspaper. To discourage the disclosure of settlement details to third parties, confidentiality provisions are of- ten included in settlement agree- ments between an employer and a former employee. I n N o r t h f i e l d M e t a l Products Ltd. v Parsons in 1991, the Ontario Labour Relations Board summarized the purpose of these provisions as follows: "The employer's fear is that the disclosure of such a payment, apart from the amount of the pay- ment, might alone undercut the efficacy of the denial of liability, and might also lead other em- ployees or unions to file further complaints, in the belief that the employer will settle such com- plaints with cash." A settlement agreement is like any other contract — and a contract can provide for conse- quences if one party breaches the contract. If a contract does not set out the employer's remedy in the event of a breach, it must be deter- mined by the arbitrator or judge. Jan Wong ruling In the Nov. 3, 2014, decision of Jan Wong v. e Globe and Mail Inc., the Ontario Superior Court upheld the arbitrator's decision that Wong's book, Out of the Blue, contained language that breached the confidentiality provision of her settlement agreement with her former employer, the Globe and Mail. e court also upheld the ar- bitrator's decision to enforce the consequences of the breach, as set out in the settlement agree- ment. e agreement provided that Wong was required to repay $209,912 if she breached the con- fidentiality provision. At the hearing, Wong main- tained it was her belief she was permitted to disclose the fact she had received a payment from the Globe and Mail, but was prohib- ited from revealing the specific amount she was paid. e book included the follow- ing phrases: "I can't disclose the amount of money I received," "I'd just been paid a pile of money to go away" and "Two weeks later, a big fat check landed in my account." e confidentiality provision provided that the parties agreed "not to disclose the terms of this settlement." The court found the above phrases constituted a breach since they made it clear Wong received a payment from the Globe and Mail. Wong also unsuccessfully ar- gued the repayment clause was, in fact, a "penalty" clause and in the circumstances of this case, it would be unfair and uncon- scionable to require her to repay the funds to the Globe and Mail. The arbitrator found that the settlement agreement was freely entered into by experienced and sophisticated parties. ere was evidence Wong understood the terms of the settlement. In addi- tion, she had months to negotiate and consider its terms and she was represented by an experienced labour lawyer. In dismissing Wong's argument that the agreement was uncon- scionable, the arbitrator stated: "I agree that it appears to be one-sided but find that there is nothing wrong or inherently unfair for one party to say, 'I will make a payment to you but you must agree not to disclose that fact, and if you do disclose it, you must give back the payments made.' In the circumstances of this case, those terms were an integral part of the agreement." A similar case, Gulliver Sch., Inc. v Snay, was decided in Flor- ida in February 2014. e former headmaster of a private school, Snay, reached a settlement with his former employer, Gulliver, re- garding a discrimination lawsuit. Within days of the parties reach- ing a settlement, Snay's daughter updated her Facebook status to say: "Mama and Papa Snay won the case against Gulliver. Gulliver is now officially paying for my vacation to Europe this summer. SUCK IT." In this case, the settlement agreement also included a confi- dentiality provision that prohibit- ed Snay from disclosing the terms of the settlement to anyone, with limited exceptions, and breach of this provision would result in the repayment of the money received by Snay. The Florida Third District Court of Appeal held that Snay was no longer entitled to receive the US$80,000 payment in accor- dance with the settlement agree- ment due to the breach of the con- fidentiality clause. While it may appear that the employers "won" the Jan Wong and Gulliver cases, the employ- ers ultimately did not receive the confidentiality that was bargained for. As an employer, it is impor- tant to be certain former employ- ees understand what constitutes a breach of confidentiality. In Barrie Police Services Board v. Barrie Police Association in 2013 in Ontario, a former employ- ee breached the confidentiality provision of a settlement agree- ment. In this case, the agreement did not set out any consequences for a breach. Nevertheless, the arbitrator ordered the former employee to repay the money he received un- der the settlement. e arbitrator concluded that the former em- ployee had deliberately breached the confidentiality provision and found this remedy was necessary to act as a deterrent for similar future breaches. Employer tips To strengthen the effectiveness of the confidentiality provisions in settlement agreements, employ- ers should consider the following: •Include a provision that sets out the consequences for a breach of the confidentiality provision. •Have a lawyer review the con- fidentiality clause to ensure the consequences for a breach will be construed as a reasonable enforcement mechanism and not a penalty clause (the latter of which would require proof of damages). •Ensure that the former employee obtains independent legal advice throughout the negotiation pro- cess and there is evidence the former employee understands the terms of the settlement. •Ensure that the confidentiality clause is specific and addresses the types of situations that would constitute a breach. Marty Rabinovitch is a lawyer and Joanne Schiffer is a student-at-law at Devry Smith Frank Lawyers & Me- diators in Toronto. Rabinovitch can be reached at marty.rabinovitch@ devrylaw.ca or, for more information, visit www.devrylaw.ca. A settlement agreement is like any other contract — and a contract can provide for consequences if one party breaches the contract. COST: $69 + applicable taxes REGISTER ONLINE: www.HRReporter.com/CPDCentre For more Live and On-demand Webinars, visit us online. WEBINAR SERIES MOBILE DEVICE MANAGEMENT – FINDING THE PROGRAM THAT FITS Striking the balance between the benets of allowing employees to access employer information on personal devices and the risks of privacy breaches. PRESENTERS: Ryan Treleaven & Carol Chan – Sherrard Kuzz LLP | DATE: On Demand Ryan Treleaven Carol Chan

• Cover