In Shaw Communications Inc. and Unifor, Local M1, Re, 2016 CarswellNat 4032 (Saunders), a dispute arose following an employee’s allegation of harassment against a coworker. The employee filed a harassment complaint, and then remained absent from work for a period of time, alleging that Shaw had created a hostile work environment. During the employee’s absence, Shaw engaged in settlement negotiations through the employee’s human rights counsel. Those negotiations failed, and Shaw terminated the employee, who was a member of the Union. Shaw alleged that the employee had abandoned her position by refusing to return to work. The Union grieved.

The Union sought to enter the settlement negotiations from the harassment complaint into evidence at the termination grievance. The Union argued that Shaw’s tone and allegations against the employee in the negotiations contributed to the purported hostile work environment. Shaw brought a preliminary application to have the settlement discussions excluded from evidence, arguing that they were protected by settlement privilege.

No right to be free from aggressive settlement negotiations

The arbitrator started from the position that settlement discussions enjoy a presumptive blanket privilege, and that the letters were presumptively inadmissible. However, if the Union could prove that the public interest in admitting the letters outweighed the public interest in protecting settlement privilege, and that the letters were relevant and necessary to proving part of the employee’s legal claim or defence, then they would be admitted.

In agreeing to exclude the letters from evidence, the arbitrator first noted that employees do not have a right to be “…insulated from an aggressive exchange of views between counsel on the merits of a severance package to settle one's human rights complaint”. While the arbitrator agreed that Shaw’s allegations of misconduct against the employee might be a relevant factor in evaluating whether Shaw created a hostile work environment, he also found that the letters were not necessary evidence. The Union had other non-privileged correspondence from Shaw, which could be used to prove facts similar to the facts the Union sought to prove from the privileged settlement communications. Further, the author of those non-privileged communications (an employee in Shaw’s Human Resources department) was available to the Union as a witness.

The content of settlement negotiations should be carefully considered

The arbitrator in Shaw may have reached a different conclusion if other evidence was not available to the Union. Employers should carefully consider the content of settlement communications, especially where the content of those communications might otherwise be relevant and necessary to proving an employee’s future case. That is especially true in labour negotiations, where there is authority for the proposition that settlement privilege might be less robust than in other forums.

Podcasts and mediation privilege?

Shaw contains another interesting facet. Following an earlier mediation, the grievor participated in a podcast, wherein she allegedly revealed confidential information from mediation. Among other things, Shaw sought an injunction to compel removal of the podcast from the internet. Arbitrator Saunders declined to make any order, holding that the remedy sought by Shaw exceeded his jurisdiction in the termination arbitration. However, other remedies may remain open to Shaw, for example a separate civil action or a new grievance. For a related discussion, see our article dealing with Jan Wong’s breach of confidentially following a settlement with the Globe and Mail.