A recent arbitration decision out of Nova Scotia, Canada, Acadia University v. Acadia University Faculty Association, 2019 CanLII 47957(ON LA), is a cautionary tale for employees who receive settlements upon termination.  The decision emphasizes that if an employee does not respect a promise to keep the terms of a settlement strictly confidential, the employer may not be required to honour its payment obligation under the settlement agreement.  Furthermore, this decision is a warning to employees who are active on social media that their social media use post-settlement may be monitored by the employer, or brought to the employer’s attention.  Any statements made by employees on social media in breach of the terms of a settlement can seriously jeopardize their right to be paid pursuant to a settlement agreement. 

Background

Acadia University terminated the employment of a tenured professor for cause.  The university’s Faculty Association filed a grievance contesting the professor’s termination.  A voluntary mediation was convened and the grievance was resolved.  Minutes of Settlement, executed by the university, the Faculty Association, and the professor, contained the following terms:

• A statement providing that the grievance was resolved “without any admission of liability or culpability by any of the parties.”

• An agreement “to keep the terms of these Minutes strictly confidential except as required by law or to receive legal or financial advice.”

• An undertaking 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.  Stated somewhat differently, it is an absolute condition of these Minutes that no term of these Minutes will be publicly disclosed.”

• A term providing for the payment of a specified amount.

Almost immediately after executing the Settlement Agreement, the professor took to Twitter where he made the following statements in this order:

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

• When one of the professor’s followers tweeted, “congrats Rick! Hope you got a nice sum monz”, the professor replied, “All I will say is that I left with a big grin on my face.”

• “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.”

Faculty Association counsel immediately advised the professor to remove his online references to having been vindicated. He did not do so. The matter then proceeded to a conference call hearing after which the professor was directed to:

• Immediately delete the tweets from his Twitter account,

• Refrain from using such terms in the future, and

• Strictly comply with the Minutes of Settlement about what he can, and cannot say, about the resolution of this matter.

In spite of this direction, the professor posted the following tweets:

• “University administrators are ruthless towards non-leftist profs who exercise their rights to academic freedom & dissent. They also have labour law on their side that allows them to fire tenured profs without cause and to weasel their way out of paying any kind of severance”.

• “You dismissed me for exercising my rights to academic freedom and dissent. Now you are withholding my severance pay….”

• Numerous other tweets also made reference to his “severance pay.”

Shortly thereafter the professor advised that he deleted the tweets that referred to him as having been “vindicated,” yet continued to make references to “severance pay.”  In addition, he wrote to the President of the university threatening to release the Minutes to the media unless certain conditions were met. 

The university argued that it should not be required to make any payment to the professor because of his repeated breaches of the Minutes. The Faculty Association did not take a position.

Arbitrator’s Decision

The arbitrator acknowledged that by referring to vindication and repeatedly referring to a payment provision and severance pay the professor violated the Minutes.  In arriving at his decision to release the employer from its obligation to honour the payment provision in the Minutes, the arbitrator made the following observations:

• All of the provisions of the Minutes were carefully and comprehensively reviewed with the professor by each of the counsel who were present before the professor signed them.

• The Minutes provided that the professor 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 professor was otherwise completely free to speak and write about his experiences at the university.

• The professor’s tweets provide ample evidence of repeated breaches of his promise of confidentiality even after he was directed to cease.

• “Quite clearly [the professor] is attempting to suggest by use of the term vindicated and by his repeated reference to ‘severance’ that there was some kind of an acknowledgment of University wrongdoing when that was specifically not the case (and likewise, there was no finding of wrongdoing by [the professor])”.

• “Settlements in labour law are sacrosanct…”

Bottom Line for Employers

Acadia serves as a reminder of how important it is for employers in Canada to include well-crafted confidentiality provisions in their settlement agreements.  These provisions should clearly set out the consequences of a breach in order to eliminate any uncertainty. 

Acadia also provides comfort to employers that arbitrators and judges are unlikely to turn a blind eye when an employee violates a promise to maintain the confidentiality of the terms of a settlement agreement.  As the arbitrator in Acadia noted, settlement agreements in the labour context are “sacrosanct,” generally because their disclosure may have the effect of encouraging other grievances, including those without substance.  The same holds true in the employment context where the disclosure of the terms of settlements may have the effect of encouraging other actions, including those without merit.  Accordingly, adjudicators will be likely to ensure that employees who disclose the terms of a settlement agreement, whether accurately or inaccurately, despite the existence of a confidentiality provision, are met with a harsh consequence, such as the loss of the payment they were entitled to receive.  Employees who fail to cease making such disclosures even after being warned to do so are at greatest risk of such a consequence. 

This article was originally published by The Lawyer’s Daily (www.thelawyersdaily.ca), part of LexisNexis Canada Inc.