In August of 2013 CCP wrote this article about Jan Wong, a long-time writer for the Globe and Mail, who was ordered to repay the money she received in a settlement with the Newspaper after she lost her job. In short, the Memorandum of Agreement ("MOA") included a well-crafted confidentiality clause in which the Newspaper, the Union, and Jan Wong herself agreed that if Ms. Wong disclosed the terms of settlement, she would have an obligation to pay the settlement money back to the Newspaper. After signing off on the MOA, Ms. Wong published a book called "Out of the Blue" in which she made certain revelations about the MOA. The Globe and Mail, of course, responded by asserting that Ms. Wong had violated the MOA's confidentiality clause, and a labour arbitrator ordered her to repay the money.
More recently, Ms. Wong took her cause to Court in an effort to overturn the arbitrator's decision. She claimed that the MOA included an "overly punitive forfeiture provision" and it was unjust for her to have to repay the settlement money. The result? Strike two for Jan Wong.
The Ontario Superior Court recently upheld the arbitrator's decision, holding that the parties agreed in the MOA to include a valid "forfeiture provision", defined as an agreement that "involves the loss of something, often money, held as security for the enforcement of an obligation." The Court held that the Newspaper was willing to pay for confidentiality, and Ms. Wong simply violated the bargain she made:
[56] It is clear that the one thing that The Globe and Mail wanted from this settlement was confidentiality. The Globe and Mail was prepared to pay for that confidentiality. The only other aspect of the MOA that benefitted The Globe and Mail was the brief period of non-disparagement. And yet, in the end result, The Globe and Mail did not get the one thing that it was paying for – confidentiality. In those circumstances, there is no inherent unfairness in a conclusion that the applicant should have to repay the monies that she received, and that she agreed to repay, if she breached the MOA.
This is an important decision in the employment context. As explained in our previous blog on this case, a well-crafted settlement can be a very useful tool for resolving disputes in a discrete and expedient manner. The Court's decision further confirms that confidentiality clauses do have teeth behind them, and just might bite back at a party who violates it. The lawyers at CCPartners have a wealth of experience in crafting settlement documents to leave employers satisfied and certain of a resolution that protects their interests.
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