I often find myself explaining the meaning of a confidentiality provision to an employer who I am representing in mediation or in settlement negotiations. I am always asked what if the other side breaches it and says something about what we have agreed to pay them? What can I do? The answer, I must admit, is a bit wishy washy. I will typically say that you hope that in including this provision, you are drawing the other party’s attention to how significant this is, and that in doing so, they will do the right thing and honour it. Reluctantly, I will add that at the end of the day, it is difficult to legally enforce these things. A breach, as well as any resulting damage, can be difficult to prove, and in attempting to do so, the initial injury can be made worse. There is also the problem of continuing to engage with someone who has left your organization, and incurring legal fees to do so. In other words, clients sign these agreements, and hope for the best.
This past Saturday, Globe and Mail writer Jeff Gray, reported on the arbitrator’s decision in the ongoing case of the Globe and Mail v. Wong. Ms. Wong, a former Globe and Mail writer, published a memoir in 2012 entitled Out of the Blue. As Gray reports, in it, Wong referred to her departure from the newspaper, and the subsequent agreement she had with them. She wrote that she had received a “big pile of money to go away”. The newspaper took a strong position against Ms. Wong, arguing that this disclosure breached the confidentiality agreement, and it won its case last week.
A confidentiality provision that prohibits the parties from disclosing the terms of the agreement they have entered into is extremely common in the employment law context. Many former employers would simply not enter into agreements with departing employees absent this protection. In fact, it can often be the driving force behind a settlement, as the employer is presented with the option of settling things quietly, and in private, or, moving to a public proceeding, in which an airing of its employment-related dirty laundry will occur.
I do not have any first hand information about this case, but it is easy to imagine how compelling that rationale would have been when settling a dispute with Ms. Wong, who has a public persona, and is often in the media. In a situation like this, the risk of the dispute becoming public was not remote.
The arbitrator agreed with the newspaper. She said that the agreement between the parties was “clear and unambiguous” and did not allow Ms. Wong to disclose any of its terms. Because she breached the agreement, Ms. Wong was ordered to return the settlement funds.
This is the second time in recent memory when an employee or former employee has been found to have breached a confidentiality provision in an agreement. Some months ago, a decision of the Human Rights Tribunal of Ontario, Tremblay v 1168531 Ontario Inc., involved a complainant who made Facebook postings duringa mediation. The posts included a reference to the settlement agreement. Parties who participate in the Tribunal’s mediation process must sign a confidentiality provision, and there was a second confidentiality provision in the settlement agreement that the parties entered into. The employer learned of the Facebook posts only after the mediation, when one of the co-worker’s of the complainant brought it to their attention. The employer brought the matter back to the Tribunal, and the adjudicator concluded that the employee had violated the agreement. As a result, the amount of money that the respondent had agreed to pay the complainant to settle the matter was reduced by $1,000.
The Wong and Tremblay cases are real life cautionary tales about why it is important for parties to take confidentiality provisions seriously, and to keep their mouths shut. If they don’t, there may be renewed legal appetite to take their indiscretions on.