Canadian Employment Law Today

with Colin Gibson Ask an Expert HARRIS AND COMPANY VANCOUVER Have a question for our experts? Email Jeffrey.R.Smith@thomsonreuters.com 2 | April 26, 2017 Canadian HR Reporter, a Thomson Reuters business 2017 Answer: When an employment dispute is settled on a without prejudice basis, the employer will usually want the settlement agreement to include a confidentiality clause. A clause of this nature will typically require the parties to keep the terms of their settlement confidential, and not to dis- close them to anyone at all. Any exceptions should be spelled out specifically — such as disclosures required by law, to the employ- ee's professional or financial advisors, to the employee's spouse (provided the spouse agrees to keep the terms confidential), or to the union's executive board. In some situations, it will be advisable to include language in the settlement agree- ment that requires the parties to keep the circumstances that gave rise to the dispute confidential. is will be particularly impor- tant where disputed allegations are highly sensitive in nature, or where their disclosure could damage the reputations of the parties or the business interests of the employer. Where a settlement agreement is breached, the usual remedies for breach of contract are available — remedies to place the aggrieved party in the position it would have been in if the contract had been performed. When a confidentiality clause is breached, however, damage can be difficult to quantify. Some settlement agreements include a provision that specifically addresses the remedy for a breach of the confidential- ity clause. Provisions of this nature must be carefully drafted to be effective. A good example of a case where a "con- fidentiality breach" clause was enforced is Wong v. Globe and Mail Inc. e employee's union filed grievances arising from the ter- mination of her employment. e griev- ances were referred to arbitration, and the arbitrator assisted the parties in arriving at a mediated settlement that included a with- out prejudice payment to the employee of $209,912. e settlement agreement con- tained a confidentiality clause, as well as a provision stating that if the employee was found to have breached that clause, she would have an obligation to repay the set- tlement funds. A few years after the agree- ment was signed, the employee published a book in which she referred to being "paid a pile of money to go away" and made vari- ous other similar statements. e arbitra- tor ruled that the employee had violated the confidentiality clause and ordered her to repay the entire $209,912. e arbitrator's ruling was upheld by the Ontario Supreme Court on judicial review. A provision that sets out monetary conse- quences for breach of a confidentiality clause will often describe the remedy as liquidated damages, representing a genuine estimate of the damages that would be suffered in the event of a breach of the clause. is lan- guage is included in an attempt to avoid hav- ing the payment characterized as a penalty, which serves to punish a party in the event of breach and may require payment of a sum that exceeds the actual damage suffered. If a remedial provision is found to be a penalty clause, it will likely not be enforceable. e absence of language providing for specific damages if a confidentiality clause is breached does not necessarily mean the employer will be left without a remedy. In Tremblay v. 1168531 Ontario Inc., for ex- ample, the employee made various Face- book posts following the settlement of her human rights complaint, despite the existence of a confidentiality clause in the settlement agreement. One post read: "Well court is done didn't get what I wanted but still walked away with some…" e Ontario Human Rights Tribunal determined that it was clear from the date and comments that she was referring to a monetary settlement. is amounted to a breach of the confiden- tiality clause. e tribunal noted the impor- tance of confidentiality and the significance of the breach, and ordered that the amount payable to the complainant under the settle- ment agreement be reduced by $1,000. Other remedies for breach of a confidenti- ality clause may include injunctive relief or a cease-and-desist order. If an employee remains in employment af- ter a settlement has been reached, and later breaches a confidentiality provision in the settlement agreement, the breach will likely represent misconduct that the employer can deal with in the same manner as any other employment infraction. Whether or not a proven breach will be sufficiently serious to justify the employee's summary dismissal will depend on all the circumstances, in- cluding such factors as the language of the confidentiality clause, the nature and conse- quences of the breach, the employee's expla- nation, the employee's length of service, and disciplinary record. For more information see: • Wong v. Globe and Mail Inc., 2014 Car- swellOnt 15512 (Ont. Div. Ct.). • Tremblay v. 1168531 Ontario Inc., 2012 HRTO 1939 (Ont. Human Rights Trib.). Confidentiality clauses in settlement agreements Question:When a harassment complaint or discipline grievance is settled, what is the best way to protect confidentiality? Can an employee be dismissed for breaching a confidentiality clause? Accommodation requests: How to protect sensitive information Question: If an employee requests accommodation based on family status, how does the employer balance the sensitivity of the employee's private information with getting enough information to evaluate the request? Answer: In most Canadian jurisdictions, family status is a prohibited ground of dis- crimination under human rights legislation. As a result, where a workplace rule has the effect of discriminating against an employee because of her family status, the employer may have a duty to take reasonable steps to accommodate the employee's circumstanc- es, up to the point of undue hardship. e nature and extent of an employer's duty to accommodate an employee because of family status may depend on the jurisdiction that governs the employment relationship. In Campbell River & North Island Transi- tion Society v. H.S.A.B.C., the B.C. Court of Appeal ruled that a prima facie case of dis- crimination on the basis of family status will only be made out if a change in a term or con- dition of employment results in "serious in- terference with a substantial parental or oth- er family duty or obligation of the employee." Under this test, most situations involving conflicting work and family obligations will not trigger the employer's duty to accommo- date, absent special circumstances. In Johnstone v. Canada (Attorney Gener- al), however, the Federal Court of Appeal ex- pressly disagreed with the decision in Camp- bell River, and ruled that where workplace discrimination on the ground of family sta- tus resulting from childcare obligations is al- leged, the claimant must show (i) that a child is under his or her care and supervision; (ii) that the childcare obligation at issue engages the individual's legal responsibility for that child, as opposed to a personal choice; (iii) ASK AN EXPERT on page 7 »

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