HR | Atlantic - Positive Change at Work

Breach of confidentiality clause in grievance settlement leads to repayment

Feb 25, 2014

Dollar Sign Key

Employers are sometimes reluctant to consider settlement on principle, even though the business case for doing so rather than expending large amounts on fighting a grievance.  Their concern is usually related whether a settlement may be seen as an admission that they were in the wrong.  Therefore, it is not surprising that many settlement agreements have a confidentiality clause preventing either side from disclosing the nature of the settlement.  The ability to enforce this clause was recently illustrated in the case of reporter Jan Wong and her settlement with the Globe and Mail.

Following a lengthy absence due to depression, the Globe and Mail dismissed the well-known reporter Jan Wong.  The Union grieved on her behalf claiming unpaid sick leave, and termination without cause.  During the arbitration, the parties agreed to negotiate a settlement.  All parties, including Ms. Wong, had independent legal advice in the matter.  As part of the negotiated settlement, the agreement included the following clause:

the parties agree not to disclose the terms of this settlement, including Appendix A to anyone other than their legal or financial advisors, Manulife and the Grievor’s immediate family.

In May 2012, Ms. Wong published a book entitled Out of the Blue. While she had the book vetted by a lawyer for any libelous passages, Ms. Wong did not obtain an opinion as to whether her book violated the terms of the settlement agreement.

As a result of the publication, the Globe and Mail applied to the arbitrator who had been involved in the arbitration of the original grievances, alleging breach of the settlement and requesting that Ms. Wong repay the entire settlement.  Arbitrator Davie found four specific references that did breach the agreement namely:

  • “… I can’t disclose the amount of money I received”;
  • “I’d just been paid a pile of money to go away…”;
  • “Two weeks later a big fat check landed in my account”; and
  • “Even with a vastly swollen bank account….”

Arbitrator Davie observed:

The fact that [Wong] did not disclose the exact amount of the payment received is immaterial to determining whether she breached the MOA. … [H]owever … although [Wong] refrained from disclosing the precise amount, she went considerably further than merely stating she had settled the matter and had received payment. In statements made in [the book] she communicated to her readers that the payment was a significant amount (‘a pile of money’ and ‘a big fat check’). In view of these descriptions of the payments it is somewhat disingenuous for [her] to maintain that she believed she did not breach the MOA because she did not quote an exact dollar and cents figure.

The Arbitrator ordered that Ms. Wong repay all monies she had received.

This is a reminder to all parties to settlement negotiations of the importance of respecting the confidentiality and non-disclosure provisions of these agreements.

 

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