Confidentiality is a cornerstone of settlements: no more so than
in the workplace. Unless it has a weak case, an employer is
generally not motivated to settle without a confidentiality
undertaking and an express agreement that the settlement is not an
admission of liability. This cornerstone was recently put to the
test in the as yet unreported July 3, 2013 labour arbitration
decision: The Globe and Mail v CEP Local 87-M (the Jan
Jan Wong is the well-known, former China correspondent for the
Globe. She was controversial for, among other things, her
"gotcha" style of journalism evidenced in her skewering
of so-called celebrities in the Globe's Lunch with Jan
Wong and later as a feature reporter. In 2006, Wong created a
firestorm when the Globe ran her article "Get Under the
Desk" in which she drew a link between the École
Polytechnic, Concordia University and Dawson College shootings on
the one hand, and the alleged marginalization of those in Quebec
who were not pure laine (racially pure) on the other.
Following the political and cultural backlash, the Globe
backtracked and stated that it should not have run the article as
written, while Wong received death threats and hate mail. She
apparently began to suffer from depression and eventually went on
an extended sick leave which itself became contentious between the
newspaper and her.
Eventually Wong was dismissed by the Globe. In response she
filed a series a grievances against the newspaper through her
union. Those grievances were rolled into a 2008 settlement between
the Globe and the union, to which Wong was a signatory. The minutes
of settlement (MOA) included provisions confirming that (i) the
terms of settlement were to remain confidential (with named
exceptions such as Wong's immediate family), and (ii) in the
event of a breach of the confidentiality obligations, Wong was to
pay back the settlement monies.
In May 2012, Wong published a book entitled Out of the
Blue in which she discussed her depression and her legal
dispute with the Globe. In it she disclosed that "I had
just been paid a pile of money to go away" and
"two weeks later, a big fat check landed in my
account". She also described the Globe as having
"caved". The Globe, believing the settlement had
been breached, sought repayment of the settlement monies. It
brought the matter back on before the arbitrator who had been
involved in mediating the settlement and who had remained seised to
deal with any disputes arising out of it.
In the meantime Wong sought first to have intervenor standing at
the hearing along with her union, and later standing to represent
herself to the exclusion of the union, positions the arbitrator
dismissed in interim awards (the latter decision being upheld by
the Divisional Court in Wong's unsuccessful judicial review
When the matter was finally heard, the arbitrator ordered Wong
to repay the settlement monies. The arbitrator rejected the
union's arguments that the repayment provision was a penalty
clause or unfair or unconscionable in the circumstances. She found
that the settlement was freely entered into by and amongst
experienced, sophisticated parties, including Wong. It had taken
three months for the parties to negotiate the settlement and its
terms. In fact, Wong used her own lawyer, in addition to union
counsel, in concluding the MOA. In effect, the arbitrator found
that Wong's breach of the confidentiality undertaking deprived
the Globe of the benefit of the bargain it had struck.
Undoubtedly, many of Wong's "victims" will take
great joy in her misfortune, albeit a setback brought on by her own
desire to "tell her story". The Globe has issued a
statement indicating that it took action on principle and upon
repayment will be donating the settlement funds to the Centre for
Addiction and Mental Health in Toronto. Wong, for her part, is
reported to have called the decision unfair and alleged that the
union "refused to present all defences against the
claim". One suspects that the union will be pressed to seek
judicial review and may itself be on the receiving end of a
complaint of a breach of the duty of fair representation.
This story, which came Out of the Blue, may well
not be at an end.
What this means for employers
Employers often think that confidentiality undertakings in
settlement agreements have little more than persuasive value. While
not many employees would be as audacious as to go out and write a
book spilling the beans, this decision reminds us that careful
negotiating and drafting of a settlement agreement can leave a
wronged employer with an effective remedy in the event of a
The foregoing provides only an overview and does not
constitute legal advice. Readers are cautioned against making any
decisions based on this material alone. Rather, specific legal
advice should be obtained.
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