Many professionals that work and practice in the human resources context know that with any workplace dispute, there is almost always an opportunity for some form of settlement discussions. In fact, most forums have procedures to encourage and facilitate a negotiated resolution. For example, wrongful dismissal matters in Toronto, Ottawa & Windsor have mandatory mediation, the Human Rights Tribunal of Ontario permits parties to opt-in to mediation, the Ontario Labour Relations Board provides facilitated discussions with Labour Relations Officers and many labour arbitrators encourage some form of settlement discussions prior to proceeding with a hearing. While productive settlement discussions require buy-in from all parties, most parties consent to participate for the simple reason that settlement often presents an opportunity for certainty, in an efficient and cost-effective manner.

While settlement almost necessarily involves some form compromise (even if it is simply a compromise of principles), it does not automatically amount to an admission of liability or wrongdoing. For this reason, parties are often careful to ensure that a settlement is not misconstrued as such. That is one of the reasons why confidentiality remains an important feature of any settlement agreement.

The recent arbitration decision of Acadia University v Acadia University Faculty Association, provides a good example of how to protect confidentiality in a proactive manner.

That case involved the breach of a previous settlement of the discharge grievances of Professor Rick Mehta. The Minutes of Settlement in that matter were negotiated and executed by the University, the Faculty Association and Professor Mehta, all of whom were represented by their own respective counsel. The key features of the Minutes of Settlement included:

A payment from the University to Professor Mehta to resolve the grievances;

The express statement that the grievances were resolved “without any admission of liability or culpability by any of the parties; and

That all parties were “to keep the terms of [the Minutes of Settlement] strictly confidential except as required by law or to receive legal or financial advice.”

In addition, as a means to define how confidentiality would be maintained, the Minutes of Settlement also contained the following undertaking:

If asked, the parties will indicate that the matters in dispute proceeded to mediation and were resolved, and they will confine their remarks to this statement. Stated somewhat differently, it is an absolute condition of these Minutes that no term of these Minutes will be publicly disclosed.

Almost immediately after the settlement was finalized and executed between the parties, Professor Mehta posted the following on Twitter:

Mehta’s Tweet: “Vindicated former professor! Advocate for free speech and institutional transparency in universities.” One of Mehta’s twitter followers replied: “ congrats Rick! Hope you got a nice sum monz.” Mehta’s Reply: “All I will say is that I left with a big grin on my face.”

“Vindicated former professor! Advocate for free speech and institutional transparency in universities.”

That twitter exchange was followed by a subsequent tweet from Professor Mehta:

Mehta: “Because I got the vindication that I was seeking. In other words, I have left the university on my term, as opposed to the administration’s or union’s terms. The NDA that I was required to sign by law is not for my protection.”

Professor Mehta refused to delete the above referenced tweets despite the Faculty Association instructing him to do so and even ignored a subsequent direction from the Arbitrator to delete the tweets and refrain from using similar language in the future.

In fact, Professor Mehta continued to tweet further about his termination including making references to “severance” pay.

The University and the Faculty Association reconvened before the Arbitrator. The University took the position that it should not be required to honour the payment provision of the Minutes of Settlement in the face of Professor Mehta’s repeated breaches.

The Arbitrator agreed, holding that the Minutes of Settlement were deliberately designed to ensure that Professor Mehta could not disclose any of the terms of the Minutes, including the payment provision, and could only say that the matters had been resolved. The Arbitrator went further to note that those were the only restrictions on Professor Mehta and that he was not restricted from speaking and writing about his experience at the University. However, because Mr. Mehta breached the Minutes of Settlement, and suggesting that he was “vindicated” and receiving “severance” when that was specifically not the case, the University was no longer required provide the payment in the Minutes of Settlement.

Takeaway for Employers

The Acadia decision provides some good lessons for employers on what to include in settlement agreements. While the importance of ensuring confidentiality is self-evident, properly safeguarding confidentiality can be tricky. In crafting proper confidentiality conditions, consider who might know about the dispute and how any communications will be handled going forward. Additionally, build in a waiting period for the payment. Such a waiting period could hopefully allow for cooler heads to prevail after a settlement is reached and incentivize compliance with the agreement. Finally, have the settlement agreement explain the consequences of a breach so as to limit any uncertainty about the remedy.

While it is impossible to guarantee the confidentiality of any settlement, a properly crafted settlement agreement is an important step to encouraging it.