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The Effects of Breaching a Minutes of Settlement

In situations involving a workplace dispute, there is typically an opportunity for the parties to resolve their dispute through settlement. Settlement provides the parties an alternative to litigation and is an option to resolve the dispute in a cost-efficient, effective and relatively quick manner. Settlement gives the parties the opportunity to control the process, determine how the dispute will be resolved and ensure finality and certainty. In the labour and employment law world, settlement is used and sometimes mandated by courts and tribunals.

However, settlement is also a tool that must be managed and navigated with care. For settlement discussions to be productive, all parties must want to engage in such discussions and must understand that each party will need to compromise. After these precursors have been established, settlement discussions can begin. Once a resolution is reached, the next important piece of the settlement puzzle is the settlement agreement or minutes of settlement. The terms of a minutes of settlement are crucial to an effective settlement and to a certain degree vary based on the facts of each case. However, there are also some standard terms which impose important obligations on the parties.

To get a better understanding of the parts to an effective resolution through settlement, I will take you through an example:

You are the employer and have a workplace dispute with a former employee. You attend at mediation with your counsel; your former employee does the same. The mediation commences, settlement discussions occur, and a resolution is reached. The Minutes of Settlement are drafted and signed. The mediation ends. Sometime after the mediation, the former employee posts to social media that they are done with the employer, that they left on their own terms and they were vindicated from any wrongdoing, implicating that they received an amount of money from their former employer. Is there anything wrong with what the former employee did and what can the employer do about it?

Some may think that what the former employee did was harmless because they never explicitly disclosed the terms to the agreement but because of the important and carefully drafted terms of the Minutes of Settlement, the employer may have recourse against the employee. Let me explain.

In a recent labour arbitration decision in Acadia University v Acadia University Faculty Association, Professor Rick Mehta was disputing his discharge from the University. Before a hearing occurred, a voluntary mediation took place. After lengthy discussions, a resolution was reached and the parties to the dispute signed the settlement agreement. The Minutes of Settlement included:

  • a payment from the University to Professor Mehta to resolve the grievances;
  • the statement that the grievances were resolved “without any admission of liability or culpability by any of the parties”;
  • that all parties were “to keep the terms of these Minutes strictly confidential except as required by law or to receive legal or financial advice”; and
  • a statement stating that, “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 [and] that no term of these Minutes will be publicly disclosed”.

After the mediation, Professor Mehta posted some tweets on Twitter, which he refused to delete after being instructed to do so by the Faculty Association and the Arbitrator. As a result, the Arbitrator found that Professor Mehta breached fundamental terms of the Minutes of Settlement that were deliberately included to ensure that the terms of the settlement would not be disclosed. The Arbitrator further noted that these restrictions were the only restrictions placed on Professor Mehta. As a result, the Arbitrator held that the University was no longer required to provide the payment in the Minutes of Settlement.

Takeaway for Employers

The Acadia decision provides a good lesson for employers to make sure that the terms of any settlement are drafted with care and attention and to ensure that they are relevant to the facts and circumstances surrounding each case. The decision is also a good lesson for employers to think about what terms and details to include in any settlement agreements. In this case, the confidentiality provision and a term indicating what would occur in the event of a breach of the minutes were crucial for the employer in ensuring an effective and fair resolution for both parties through settlement. Settlement is not only an effective tool to resolving workplace disputes but the effects of breaching a minutes of settlement can have a profound impact for in both a negative and positive way.