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Date:
2018.04.12

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THE EMPLOYERS' EDGE

Does the Release signed by your former employee cover claims of sexual harassment arising during employment? Likely not says Ontario Superior Court of Justice!

In light of powerful movements such as #metoo and #timesup, workplace sexual harassment is a top concern for all employers. In a recent decision, the Ontario Superior Court of Justice held that a Full and Final Release signed by the Plaintiff upon the termination of her employment did not prevent her from claiming damages for claims related to sexual harassment by her former Manager.

The Plaintiff was employed with the Defendant, Salvation Army, for about four months. During this time, she was subject to sexual harassment by her Manager (another Defendant in this action). Upon the termination of her employment, the Plaintiff executed a Memorandum of Settlement and a Full and Final Release in exchange for a payment of $10,000.

The Memorandum of Settlement provided that the Plaintiff and the Defendant, Salvation Army, acknowledged the mutual agreement of separation of employment and that the:

….. The Employer and Employee having regard to their respective rights, duties and obligations, have determined that they wish to resolve any and all claims, complaints, actions, disputes etc. between them arising out of the employment relationship or the termination of that employment; ...

 Further, the Release signed by the parties stated that the Plaintiff agreed to release any and all claims she has or may have against the Salvation Army which arise out of or which are in any way connected to her employment. Further, it included:

 ……This release of claims shall include any claims against anyone or any organization in any way associated with The Salvation Army which arise out of or which are in any way related to or connected with my employment or the ending of my employment.;…

Despite the executed Memorandum and Release, the Plaintiff commenced an action, four years later, seeking a damage award for negligence, intentional infliction of emotional harm and breach of fiduciary duty.  

The Defendant Manager argued that the Plaintiff’s claim should be dismissed on the grounds that by executing these documents she released all her claims against him. The Court disagreed.

The Court concluded that the Release could not be considered all inclusive. It further held that, “While many of the alleged events occurred at the place of employment and, perhaps, because of the employment, sexual harassment, intimidation and other improper conduct are not connected to employment. They are clearly separate matters.”

The Court also noted that the settlement with the Plaintiff was negotiated by the HR manager and cases involving sexual misconduct were handled by the Director of Employee Relations. Accordingly, the settlement pertained to the issue of severance only and specific language would have to be included to bar such claims by the Plaintiff.

On the issue of jurisdiction, the Court clarified that the Plaintiff’s claim was not based on sexual harassment, although the phrase was commonly used. As such, the Court and not the Human Rights Tribunal had jurisdiction to hear the common law claim of intentional infliction of emotional harm.

This decision leaves employers wondering whether a Full and Final Release executed by an employee must include release from claims arising from sexual misconduct, discrimination or harassment and whether such events of harassment or intimidation are separate from an employee’s employment relationship.  While this cases leaves employers with many questions and concerns, it also serves as a reminder to employers on the necessity of carefully drafting a Release that protects them. Employers are also encouraged to review their standard release agreements to ensure they include related claims of harassment, discrimination and the like. Click here for the team at CCP who can help you with all your contract drafting needs that arises out of your employment relationship. 

Click here to access CCPartners’ “Lawyers for Employers” podcasts on important workplace issues and developments in labour and employment law.

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