In L.C.C v M.M. ( 2023 HRTO 1138) Adjudicator Lavinia Inbar was dealing with an allegation that the former employee had breached a settlement agreement by publishing on LinkedIn the following statement :
“To all those inquiring, I have come to a resolution in my Human Rights Complaint against [the applicant corporation] and [the individual applicant] for sex discrimination.”
The Minutes of Settlement contained the following provisions :
Confidentiality: The Applicant may disclose the terms of these Minutes of Settlement to [their] immediate family, legal and financial advisors, on the condition that they also agree to maintain strict confidentiality of these Minutes of Settlement. Upon inquiry by any person about the resolution of the Application or conclusion of the Applicant’s employment with [the applicant corporation], the Applicant shall simply state that all matters have been resolved. The Applicant will make no mention of, or allude in any way whatsoever to, the receipt of money or the amount of money received from [the applicant corporation] in this Settlement.
Mutual Non-Disparagement: The parties agree that the purpose of this Settlement is to resolve any issues the Applicant has with the Respondents on a confidential basis and without any disparagement of the parties. Accordingly, the parties agree to refrain from making any oral, written or electronic communications about each other that are untrue, defamatory, disparaging, or derogatory, or acting in any manner that would be likely to damage the opposite party’s reputation in the eyes of customers, regulators, the general public, or employees, unless required by law. This non-disparagement includes but is not limited to any electronic communications through social media (such as Facebook, Twitter, Instagram, Youtube, Snapchat, etc.)
Breach: The Applicant agrees that if [they breach] any of the obligations under this Settlement, and in particular the confidentiality obligation set out in paragraph 7 and the non-disparagement obligation in paragraph 8, above, [they] will be required to repay to the [corporate] Respondent the Settlement Payment paid to [them] under paragraph 2 of these Minutes of Settlement as liquidated damages, and will be responsible for any additional damages incurred by the [corporate] Respondent.
Understanding: The Applicant hereby declares that she has had an opportunity to obtain independent legal advice regarding the matters addressed in these Minutes of Settlement or has freely chosen not to do so, and that she fully understands her obligations under these Minutes of Settlement. She voluntarily accepts the terms and conditions set out in these Minutes of Settlement and agrees to finally settle all claims or potential claims, as described above, that she has or may have in future against the Respondents.
The HRT found that the confidentiality provision had been breached because they were only allowed to tell others about the resolution if someone inquired about it. Instead they published it to the whole world .
Secondly it was found that by referencing both the names of both the Corporate and individual Respondents and by referring to the issue as sex discrimination, this would , in the eye of the average reader of the post, likely damage the reputation of the Respondents.
The Adjudicator went on to find that the forfeiture clause was not a penalty clause because given the importance to the contracting parties that both sides respect the settlement and the difficulty of determining damages, that the forfeiture clause was a in fact a reasonable pre-estimate of damages and thus enforceable.
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