When can grievors be ordered to repay settlements?
Christine Davies looks at the risk of talking about confidential settlements
When grievances are settled, it is very common for the settlement documents to contain a provision requiring the grievor to keep the terms of the settlement confidential. What happens when the grievor breaches such a provision by telling their co-workers or friends that they “won” their case or that the employer was forced to pay them a lot of money? Recently, arbitrators have been taking a hard line against grievors in these situations. In two recent cases, the grievors were required to repay the full amount of what was paid to them under their settlements.
In the first case, Globe and Mail v. Communications, Energy and Paperworkers Union of Canada, Local 87-M, the grievor was a newspaper reporter who had filed grievances concerning her entitlement to sick leave and the employer’s unjust termination of her employment. During the course of the arbitration, the parties reached a settlement and entered into a memorandum of understanding which contained a provision that the terms of the settlement would not be disclosed to anyone other than the parties’ legal or financial advisors, the insurance company, and the grievor’s immediate family. The settlement specifically provided that if the grievor breached this provision, she would be required to repay to the employer all of the money she received in the settlement.
A few years later, the grievor published a book about her experiences. She believed she could disclose that she had received money in the settlement, just not the amount of money. Thus, she believed she could write that “a big, fat check landed in my account” and “I’d just been paid a pile of money to go away.”
However, the arbitrator considered it “immaterial” that the grievor did not disclose the specific amount, noting that she had communicated that the amount was “significant.” The arbitrator held that the settlement was freely entered into by sophisticated parties after months of negotiations, during which the grievor was represented by counsel. If the grievor misunderstood her obligations under the settlement agreement, responsibility for that error rested with her. The grievor’s actions were not inadvertent, and it was impossible to “undo” the loss of confidentiality. Ultimately, the arbitrator concluded it was appropriate to require the grievor to repay the amounts that had been paid to her under the settlement. The arbitrator’s decision was upheld by the Divisional Court.
In Barrie Police Services Board v. Barrie Police Association, the association settled a grievance on the grievor’s behalf. Following the settlement, the grievor posted a notice on the bulletin board indicating the amount of the payment to him, and further specifying that the association had agreed to the settlement despite the grievor’s wish to challenge the “honesty, integrity and credibility” of the employer’s case. The arbitrator held that the grievor was bound to the confidentiality provision notwithstanding the fact the union had signed on his behalf. The union had carriage over the grievance, and the terms of the settlement were therefore binding on the grievor, whether or not he agreed with those terms or whether he signed the settlement agreement himself.
The settlement language at issue in the Barrie case was very sparse, and simply provided “This agreement is strictly confidential and without prejudice or precedent to any other matters.” The association attempted to argue that the clause only precluded the association from disclosing the terms of the settlement to its membership. The association further argued that the clause did not specify any specific penalty for the breach, suggesting that damages should be calculated in a proportional manner. However, the arbitrator noted the importance of confidentiality to the grievance settlement process and the need to deter grievors from disclosing details about confidential arrangements. In the circumstances, because the grievor’s actions in revealing the terms of the settlement were deliberate, the appropriate remedy was for the grievor to return the entire amount of the settlement to the employer.
In these cases, arbitrators have held that when a grievor deliberately discloses the terms of a settlement of a grievance, he or she can be ordered to repay all the money received under the settlement. These consequences are obviously very serious, because there may be a lot of money at stake and because, in entering into a settlement, the union and the grievor gave up the opportunity to have the grievance determined on the merits by an arbitrator. Consequently, the grievor may be left with nothing. It is therefore very important for unions and grievors to take confidentiality provisions in settlement agreements very seriously and to avoid commenting on settlements to others, including in the workplace or through social media.