Breaching Confidentiality of a Settlement

October 22, 2019 Hull & Hull LLP Estate & Trust, Estate Litigation, Estate Planning Tags: 0 Comments

Often, matters are settled with a term requiring that the terms of the settlement be kept strictly confidential. What happens if such a term is breached?

The decision of an arbitrator in Acadia University v. Acadia University Faculty Association, 2019 CanLII 47957 (ON LA) provides an answer. There, Dr. Rick Mehta, a tenured professor, was terminated for alleged cause. The matter was settled at a voluntary mediation. Faculty counsel were present, along with Dr. Mehta’s personal counsel.

A term of the settlement provided that the settlement was “without any admission of liability or culpability by any of the parties”. Further, the parties agreed “to keep the terms of these Minutes strictly confidential except as required by law or to receive legal or financial advice.” “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.”

Under the settlement, Dr. Mehta was to receive a specific payment, said by the arbitrator to be a “relatively modest amount”.

Unfortunately for Dr. Mehta, he tweeted that he had been “vindicated”. In response to a comment from a follower stating that the follower hoped that Dr. Mehta received a “nice sum monz”, Dr. Mehta replied saying “all I will say is that I left with a big grin on my face.” He later tweeted that “I got the vindication that I was seeking. … I have left the university on my term, as opposed to the administration’s or union’s terms.”

Dr. Mehta was ordered by the arbitrator to remove the tweets. Dr. Metha responded with more tweets referring to his “severance pay”. He threatened to release the Minutes to the media unless certain conditions were met.

The arbitrator found that there was a clear breach of the Minutes. The arbitrator went on to find that by reason of the breach, the University was not required to honour the payment provision under the Minutes.

A similar result was reached in the decision of Jan Wong v. The Globe and Mail Inc., 2014 ONSC 6372. There, reporter Jan Wong reached a settlement after the termination of her employment by The Globe and Mail. The settlement contained a term that Ms. Wong would not, until August 1, 2009, “disparage The Globe and Mail or any of its current or former employees relating to any issues surrounding her employment and termination… .” The settlement further provided that the terms of the settlement were not to be disclosed. The settlement also contained a provision that if there was a breach, Ms. Wong would have an obligation to pay back the settlement funds.

Subsequently, Ms. Wong wrote a book about her relationship with The Globe and Mail. It was to be published by Doubleday. The Globe and Mail objected to the publication of the book, and Doubleday terminated its publication contract with Ms. Wong. Ms. Wong then self-published her book.

In her book, Ms. Wong did not say what she was paid as severance. However, she made various references to the payment, including:

  • “I’d just been paid a pile of money to go away …”;
  • “Two weeks later a big fat check landed in my account”; and
  • “Even with a vastly swollen bank account …”.

The Globe and Mail argued that these references were in breach of the Minutes of Settlement. The arbitrator agreed. Ms. Wong’s application for judicial review was dismissed. Ms. Wong was ordered to repay the $209,912 in severance that was paid to her.

Bottom line: If your Minutes of Settlement contain a confidentiality clause, keep the settlement confidential!

Thank you for reading.

Paul Trudelle

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