Employment & Labour, Mediation

Overturned release undermines settlements

By AdvocateDaily.com Staff

Litigants should face a high bar to set aside releases after a judge allowed a woman to sue her old boss for sexual harassment despite a previous settlement with her former employer, Toronto employment mediator and arbitrator Barry B. Fisher tells AdvocateDaily.com.

“I’m always wary of decisions overturning releases, especially as a mediator; they’re almost sacred in my view,” says Fisher, principal of Barry Fisher Arbitration & Mediation.

He acknowledges that a hard line on the enforceability of releases will occasionally result in what judges will see as an injustice, but says it’s for the greater good.

“The legal system is dependent on people being able to rely on settlements because that’s how 99 per cent of cases end. If releases are not upheld, then it makes settlement impossible because the only thing the defendant is buying is peace,” Fisher says.

“It doesn’t mean they can’t be set aside on certain criteria, but the default should be that they’re not to be interfered with.”

The Ontario Superior Court case, which has not been appealed, involved a woman who managed a thrift store and collected $10,000 as part of a settlement with her employer following her termination in August 2011.

However, four years later, when her former supervisor was terminated with cause after a sexual harassment complaint, the woman launched a fresh claim against her old employer and her manager, alleging damages for his sexual harassment of her.

The woman’s former supervisor moved to have her claim summarily dismissed, based on the release she signed back in 2011, which covered any claims against anyone or any organization in any way related to or connected with my employment or ending of my employment.”

But the judge sided with the woman, ruling that the release could not be “considered all-inclusive.”

“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,” he wrote in the Feb. 26 judgment. “They are clearly separate matters.”

Fisher says he disagrees and believes the judge “picked apart the release unnecessarily.”

“He goes behind the release to see who negotiated it, and I think he’s just stretching because he doesn’t want this alleged harasser to get off lightly,” he says. “My concern is that it would lead to more releases being disrespected.”

In addition, Fisher says the judge’s conclusion that sexual harassment and other improper conduct are not connected to employment could provide ammunition for employers seeking to avoid vicarious liability for misbehaving employees in future.

“That part is very troubling because I think if we understand anything about sexual harassment, it’s that it arises out of the course of employment,” he says. “There’s a fundamental difference between me trying to pick up a woman at a bar, as opposed to me making a sexual solicitation as her boss. It’s all about the power imbalance that arises out of the employment relationship.”

Fisher says he fears the decision may also lead lawyers to craft even wordier releases in order to make settlements stick, noting that the language in the 2011 release was relatively standard.

“Releases are already too long and complicated in my view, and this is going to make them worse as lawyers list every possible claim they can think of,” Fisher says.

He says he once handled a mediation in which a plaintiff’s lawyer was explaining what the two-page release signed as part of the settlement meant to a client:

“The lawyer said: ‘It means you can’t frickin’ sue them for anything else,’” Fisher says. “I think that’s exactly what releases should say and no more, because then everyone would understand it.”

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