Oftentimes, employees will chafe when they are asked to sign confidentiality agreements limiting their ability to talk about a settlement reached regarding the termination of their employment. Many employees feel (perhaps rightly) that doing so allows the employer to avoid a public shaming for its behavior.  In the end, most employers insist upon confidentiality as one of the terms of the settlement, and they regularly include recourse for themselves if there is a breach of those terms. Recently an arbitrator and the Divisional Court in Ontario confirmed the importance of complying with the obligations in a settlement agreement.

In her book, Out of the Blue, Jan Wong chronicles her experience with workplace depression. Topics canvassed in the book include her struggle to obtain disability benefits, the termination of her employment and, ultimately, her recovery.  After a protracted dispute, Ms. Wong’s union succeeded in securing six months of sick-leave pay and a sizeable lump sum payment, equivalent to two years’ wages.  In exchange, Ms. Wong signed an agreement imposing certain obligations on her, including the obligation “not to disclose the terms of this settlement.”

The employer argued that, with the publication of Out of the Blue, Ms. Wong breached the confidentiality agreement. In her book, Ms. Wong disclosed that her employer paid her “a pile of money to go away”. She also wrote about receiving a “big fat cheque” and having a “vastly swollen bank account.” The employer brought the matter back in front of an Arbitrator, who concluded that Ms. Wong breached the conditions of settlement. She was therefore ordered to repay the settlement monies to her employer.

Ms. Wong applied for judicial review of the Arbitrator’s decision, but her application was recently dismissed by the Ontario Divisional Court in Wong v The Globe and Mail, 2014 ONSC 6372 . The Court stated, “The deal under the [settlement agreement] was clear. The Globe and Mail was to pay a large lump sum and the applicant was to stay quiet about the payment.” Justice Nordheimer concluded: “I cannot find any fault in the Arbitrator’s conclusion…in fact, it is hard to see how the Arbitrator could have concluded otherwise.”

The decisions of the Arbitrator and the Divisional Court offer an important lesson to any employee entering a settlement regarding the termination of their employment or a similar legal issue: when signing a settlement agreement, ensure you fully understand your continuing obligations, including an obligation to keep the terms of the settlement confidential. If you are considering a settlement or a severance offer, you should review its terms carefully with an employment lawyer to ensure you know your obligations, and the consequences of breaching those obligations.

[This article is for informational purposes only and does not constitute legal advice, which cannot be given without consideration of your individual circumstances.]