Have you ever wondered whether confidentiality
clauses typically found in Minutes of Settlement have any teeth? Well, then you will be interested in
Tremblay v. 1168531 Ontario Inc., a case recently decided by the Human
Rights Tribunal of Ontario (“HRTO”).
While at the mediation of the original
Application, the former employee Applicant, Trish-Ann Tremblay, posted the
following statements on her Facebook page:
- Sitting in court now and
__________ [blank in original posting] is feeding them a bunch of bull
shit. I don’t care but I’m not leaving
here without my money…lol.
- Well court is done didn’t get
what I wanted but I still walked away with some…
- Well my mother always said
something is better than nothing…thank you so much saphir for coming today…
These messages were subsequently discovered
by the Company’s assistant manager. These
posts were a breach of the confidentiality obligations of the HRTO’s mediation
process and the Minutes of Settlement signed by the parties.
Specifically, the HRTO’s standard mediation
form, which both parties signed, stated that, “We understand and agree that
this is a confidential process….all statements made during the mediation are
without prejudice and cannot be used in evidence before the HRTO or in any
other civil proceeding.” Similarly, the
Minutes of Settlement contained the following language:
The Applicant and
the Respondents agree to maintain confidentiality of the terms of these Minutes
of Settlement, and shall not discuss or disclose the terms of the settlement
with anyone other than immediate family, or legal or financial advisors, or as
required by law.
The Company’s reaction upon learning of the
statements made by Ms. Tremblay was to not pay Ms. Tremblay the settlement
funds agreed to at mediation. Both
parties then filed Applications for Contravention of Settlement with the
HRTO. The Company argued that the breach
of the settlement rendered the agreement null and void and therefore it ought
not to have to pay anything to Ms. Tremblay.
After not denying that she made the comments, Ms. Tremblay argued that:
(a) there was no proof that she was talking about the Company since she did not
mention it by name; (b) Facebook was private; (c) there was no disclosure of
the exact quantum of the settlement; and therefore (d) she ought to be awarded
$5,000 in damages for pain and suffering as a result of the Company’s failure
to pay the settlement funds.
The fact that Ms. Tremblay did not disclose
the specific amount of the settlement was not considered relevant to the
question of whether there was a breach of the settlement, but the HRTO did
consider it relevant to the determination of the appropriate remedy for the breach. The HRTO found that Facebook was not private
as alleged by Ms. Tremblay given the ease with which the Company discovered the
postings. Moreover, the HRTO found it
significant that Ms. Tremblay’s breach of the settlement occurred in a small
community, thereby amplifying the potential reputational damage to the Company.
In the result, the HRTO found that both
parties had breached the Minutes of Settlement and ordered that the Company pay
the settlement amount owing plus interest, less $1,000 to remedy Ms. Tremblay’s
breach of confidentiality.
In its reasons, the HRTO found that “a
breach of the confidentiality provision in a settlement is a significant breach
of the agreement” because “if these provisions are routinely ignored by
applicants there may be a disincentive for respondents to settle human rights
applications.” The HRTO cited, with
approval, the Ontario Labour Relations Board’s statement in Northfield Metal Products Ltd., wherein
it stated: “many of these [settlements] would no doubt never have been
finalized if the employer could not have been assured that no liability or
blame could be attributed to the employer.”
As a consequence of this decision, it is
important for employers to: (i) include well drafted confidentiality clauses in
Minutes of Settlement at the HRTO; (ii) impress upon company representatives
attending mediations at the HRTO both the meaning of and importance of
respecting confidentiality clauses; and (iii) request that the mediator and/or
the representative of employees impress upon them the meaning and importance of
respecting confidentiality clauses.
As a practical matter, employers are well
advised to specifically instruct company representatives on exactly what would
be considered an appropriate response to inquiries which inevitably follow
mediation. More often than not, it is
simplest to instruct company representatives to respond by saying, “I’ve been
informed that everything discussed at mediation is confidential and that I am
under a legal obligation not to disclose anything that was said.” Alternatively, company representatives could be
instructed to respond by saying, “The issues have been resolved and the terms
of the mediation agreement do not permit me to say anything more.” In some cases, agreements to respond in one
of the ways described above have been written into the settlement agreement
itself to ensure that all parties know how to deal with questions.