When employers and employees settle disputes relating to the cessation of the employee’s employment, the employee will generally be required to sign a release document that will prevent him or her from bringing any claims or applications against the former employer relating to his or her employment. Although straightforward on its face, sometimes it can difficult to determine when an issue is employment-related for the purposes of such a release.
In Watson v. The Governing Council of the Salvation Army of Canada, 2018 ONSC 1066, the Ontario Superior Court of Justice had to determine whether sexual harassment in the workplace was covered by a release signed with respect to employment.
The plaintiff, Emma Watson (“Ms. Watson”) was employed by The Governing Council of The Salvation Army of Canada (“Salvation Army”) as a thrift store manager from April to August 2011. Upon the cessation of her employment, Ms. Watson signed a Memorandum of Settlement and a Release. The Release stated that it was given by Ms. Watson “with respect to her employment at The Salvation Army and the ending of her employment,” and that she agreed to release the Salvation Army for “all claims… which arise out of or which are in any way related to or connected with [her] employment or the ending of [her] employment.”
Despite the Release, Ms. Watson commenced an action against the Salvation Army and David Court (“Mr. Court”), a former Salvation Army employee, in August 2016, alleging acts of sexual harassment by Mr. Court, many of which allegedly took place at the workplace. Although Ms. Watson and the Salvation Army reached a settlement, Mr. Court brought a motion for summary judgment to have the action dismissed, partially on the basis that Ms. Watson had executed a Full and Final Release.
The Court’s Decision
The Court had to determine whether the Release covered Ms. Watson’s allegations. That is, whether sexual harassment at the workplace was covered by the scope of the Release.
The parties and the Court agreed that the Release was unambiguous, and Justice D.J. Gordon determined that its scope was defined by the words “ … arise out of … my employment”.
The Court then held that “the Release cannot be considered all inclusive, including the claims herein, as the scope was the employment relationship. 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. They are clearly separate matters.”
As such, the motion for summary judgment was dismissed, and the action was allowed to continue.
Following this decision, it is possible that many releases signed as part of the settlement of an employment matter do not cover claims relating to sexual harassment, regardless of where the alleged sexual harassment occurred. Employers should consider explicitly adding language to releases to ensure that they cover claims relating to sexual harassment, whereas employees who have signed a release and have a potential sexual harassment claim should consult a legal professional to determine whether they are likely barred from taking legal action.