Employment & Labour

Case puts employers on notice to draft comprehensive releases

By AdvocateDaily.com Staff

A recent Ontario court decision may change how employment releases are drafted when a working relationship is terminated, Toronto employment lawyer Jordan Rodney tells AdvocateDaily.com.

Rodney, founder of Rodney Employment Law, says the case demonstrates that a signed release doesn't always guarantee that an employer will not face further liability.

“I think it’s a very interesting decision because a release typically clears employers. In 99 per cent of the cases, you’re fine, but this case raises doubt on that,” he says.

At issue was a woman who claimed she had been sexually harassed at work. When she left the job in 2011 by "mutual agreement of separation of employment," she was given a severance package including $10,000 and signed a release resolving all claims related to the employment relationship, the decision states.

In 2016, the woman launched a lawsuit accusing her former colleague of sexual harassment during her employment and said both he and the employer were liable for his conduct. Both defendants denied the allegations, according to court records.

The colleague responded by filing a summary dismissal application of her claim on the basis that she signed the release, Rodney says.

“The court ultimately dismissed his application, deciding that her claim against another employee for conduct in the workplace fell outside the employment relationship,” he says.

“I conclude the Release cannot be considered all inclusive, including the claims herein, as the scope was the employment relationship,” writes Justice D.J. Gordon in his decision. “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.”

Rodney says because the release was vague and not specific, it opened the door for the woman to launch a suit. The lesson, he says, is that employers need to be very proactive with releases, ensuring they are not overly broad.

“You don’t want to have a generic release — it should always include issues related to potential liability. In this case, the release wasn’t specific enough,” Rodney says.

Sexual harassment falls under both human rights and health and safety legislation so the employer would have a much stronger argument if there was a clause in the release addressing those specific areas, he says.

Rodney says there have been previous cases involving workers' compensation in which the adjudicator found that although harassment emerged from the employment, it did not directly relate to it and was therefore, not covered under workers’ compensation.

Society and the workplace have significantly changed since 2011 when the woman initially signed the release, he says. High-profile cases where sexual harassment and sexual assault are alleged — including those involving former CBC broadcaster Jian Ghomeshi and American film producer Harvey Weinstein — contributed to the development of the #MeToo movement, putting a spotlight on sexual harassment in the workplace, Rodney says.

“Prior to the #MeToo movement, the provincial government introduced Bill 132 in September 2016 to reinforce the importance of a harassment-free workplace," he says. "There’s obviously a heightened awareness of the issue. The most important thing is to ensure that a release includes all activities arising from and potentially connected to the employment.”

Rodney typically asks employee clients seeking his help if they have an employment agreement and a signed release. In the past, this document would signal that there’s little likelihood that they had a case. But this recent decision changes all that, he says.

“In the majority of cases before this, once an employee signed a release, there was not much a lawyer could do. This case opens the door for employees to be able to file a claim or an application for not only harassment but any improper conduct that was not directly related to employment.

“As a result, I think we’re going to see a potential flood of similar cases making their way to the courts.”

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