In Marquardt v Strathcona County, 2014 AHRC 3, the
Alberta Human Rights Commission ("AHRC" or
"Tribunal") considered the validity and enforceability of
an employment release that was signed by a departing employee.
Marie Marquardt was employed as a bus driver prior to being
involved in two motor vehicle accidents in 2011. Following these
accidents, Ms. Marquardt took time off work to recover. She was
deemed fit to resume work as of June 28, 2011 and returned to work
on July 4. On July 11, she left her employment again for medical
reasons. She was deemed fit to return to work by August 1, 2011 and
returned to work on August 22. Eventually, Ms. Marquardt's
employer decided to terminate her employment and presented her with
a termination letter, severance payment, and a release. Ms.
Marquardt accepted the severance and signed the release.
Subsequently, in September of 2012, Ms. Marquardt filed a human
rights complaint alleging that she had been discriminated against
on the basis of a mental disability.
The case centred around the release and two issues: whether the
release was valid and enforceable, and whether Ms. Marquardt had
presented evidence which could successfully challenge the validity
and enforceability of the release.
Employment Termination Releases: A Five-Point Test for
The Tribunal began its analysis by stating that a release is
presumed to be valid and enforceable if its validity is not
reasonably put into issue. Therefore, the onus of persuasion is on
the party opposing the validity of the release. The Tribunal
engaged a five-pronged discussion of some key analytical factors
associated with determining the validity of a release:
1. Unconscionability and Consideration
The Tribunal found that the amount of severance offered, while
low, was not so low as to be unconscionable. The employee also
received something of legal value in exchange for the release,
namely, the severance pay.
2. Duress, Undue Influence and Financial Need
The Tribunal summarized that the evidence before it was, at
best, that the employee was "unhappy" about the severance
amount and felt "ill-treated." However, there was no
evidence of coercion, duress, or pressure exerted by the employer
with respect to the severance amount or the needs of the
3. Timing of the Termination
The employer was not aware of the employee's mental health
status at the time of termination, nor could the employee offer
evidence that the employer knew, or ought to have known, of her
mental health status. Further, at the time of termination, there
was no evidence that the employer manipulated the timing of the
signing of the release.
4. The Release Itself
The terms were found to be clear and concise since the
termination letter clearly laid out:
the basis for termination;
a calculation of the severance amount;
the requirements for the signing of the release;
confirmation of documents to follow;
a description of benefit plan considerations; and
general best wishes in future.
Significantly, the Tribunal found that "the Release itself
is clear and not overly complex in the language used. The Release
specifically references relevant legislation, including the Act. It
addresses the need for independent legal advice."
5. Lack of Capacity
There is a legal presumption that an adult has the legal
capacity to enter into a contract, such as a release. The burden
lies with the party seeking to overturn the release to show that
they lacked the legal capacity at the time of signing. In this
case, the employee alleged that she could not enter into a contract
at the time when she signed the release because she was mentally
disabled at the time. While the employee presented some evidence of
mental disability, the Tribunal ultimately found that the
employer's witnesses were forthright and that there was no
evidence of malicious or manipulative behaviour. The employee was
unable to show that she lacked the legal capacity to sign the
Tip for Employers: Be Clear, Concise and Forthright When
Drafting a Release
This decision illustrates the importance of being clear and
concise in the drafting of a release, and being forthright when
presenting it to an employee. While employees remain free to
challenge the validity of a release, they must present compelling
evidence to override the presumption that they had the legal
capacity to sign the release. In the employment and human rights
context, employers can ensure that releases are upheld by drafting
them using simple, plain language, by ensuring that the terms of
the termination letter and the release are clearly explained to the
employee, and by documenting all of the steps taken throughout.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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