Order to Repay Settlement Hurts!

Written by on August 15, 2013 in Contracts, Employment Law Blog
Signing a contract agreement

In 2008 Jan Wong entered into a settlement agreement with her former employer The Globe & Mail as a result of of their terminating her for cause after she missed 6 months work due to depression. As part of this agreement Ms. Wong agreed to keep the settlement confidential. Ms. Wong thereafter made comments with respect to her settlement in her book, Out Of The Blue, as well as in tweets and to media, to which The Globe & Mail objected.

Arbitrator Louisa Davie ruled that Ms. Wong’s book breached the agreement that she not disclose the terms of settlement to anyone other than her legal and financial advisors, insurance company and immediate family. Davie ruled that Ms. Wong repay the settlement sum to The Globe & Mail.

This ruling will likely prompt legal counsel to advise their clients as to the seriousness of the confidentiality clause and the potential sanctions for breaching it. Employees will likely be more close lipped about their settlements and employers will be more willing to bring an action against employees for the repayment of the settlement in the event of a breach of it by employees.

Lessons for Employers

Employers now have more assurance that any settlement with a properly drafted confidentiality clause will be kept confidential, failing which they may be able to obtain repayment of the settlement in the event of a breach. Employers are well advised to ensure that the settlement payment is conditional on the employee keeping the sum confidential and then spell out that in the event of default the entire settlement sum should be repaid. Employers should have experienced Employment Law Counsel draft the terms of settlement to include the above terms to protect the confidentiality of their settlements.

Lessons for Employees

Employees are well advised that a confidentiality clause in a settlement means just that – to keep the settlement and amount of monies paid confidential. To protect employees from overly eager employers the confidentiality clause should specifically state what can be said – for example “that the matter has settled” so that there is no uncertainty about what can be said or not, and so that an accurate response can also be made. Employees should have experienced Employment Law Counsel advise them precisely on the terms of settlement, specifically the confidentiality clause.

Minken Employment Lawyers is your Canadian source for expert Employment Law advice and advocacy on today’s employment law issues. Whether you are an employer or employee, we can help. Contact us to see how.

For more information, see The Globe and Mail article “Wong ordered to repay settlement after breach of agreement with Globe”.

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