Release Does Not Prevent Employee From Bringing Sexual Harassment Claim

Written on behalf of Arbesman Hamilton LLP

When someone is terminated from a job, they may find themselves faced with having to sign a release in order to receive payment in lieu of notice exceeding what is provided for in the Employment Standards Act, 2000, S.O. 2000, c. 41 (the “ESA”). In a recent case before the Ontario Superior Court of Justice, the court was tasked with determining whether a release barring the employee from commencing an action for sexual harassment could be enforced.

The termination and the release

The employee was terminated by the employer in 2011 after working as a store manager for the employer for just three months. On August 9 of that year, she signed a Memorandum of Settlement and a Full and Final Release. After doing so, she received a lump sum payment of $10,000.

The Memorandum of Settlement contained a paragraph stating, “… The Employer and Employee having regard to their respective rights, duties and obligations, have determined that they wish to resolve any and all claims, complaints, actions, disputes etc. between them arising out of the employment relationship or the termination of that employment; …”

Sexual harassment claim

On August 16, 2016, she commenced an action by statement of claim seeking a damage award for negligence, intentional infliction of emotional harm, and breach of fiduciary duty by the employer during her time of employment. She alleged that she was sexually harassed by the employer’s National Director of Operations for its National Recycling Operations Division (“the director”).

Both the employer and the director denied the allegations, which came after a private investigation found there to be eight complaints against the director by current and former employees. The director was terminated by the employer following the investigation.

The director sought a summary judgment dismissing the actions on three grounds. They were:

  1. (The employee) executed a Full and Final Release;
  2. The Ontario Human Rights Tribunal has exclusive jurisdiction; and
  3. The evidence does not support the claims.

Does the release bar the employee from pursuing her claim?

The court noted that the director can, in some circumstances, enforce a contractual benefit to which he is not a party. In light of this, the court had to look at the language of the release and ask whether it was intended to cover all possible matters.

The court zeroed in on the part of the release that states all matters “…arise out of…my employment” which defines the scope of the release. The court found the release could not be considered all inclusive, and that some of the alleged events occurred outside of the place of employment, and that even though they may have been related to employment, “sexual harassment, intimidation and other improper conduct are not connected to employment.  They are clearly separate matters.”

The court held that language would have to be added to the release if the release was to bar claims such as that before the court, language would.

This, coupled with evidentiary matters that require a trial, led the court to dismiss the motion for summary judgment.

At Arbesman Hamilton LLP we help both employers and employees in matters of workplace disputes or incidents. If you are an employee who feels you have been sexually harassed or your rights otherwise have been violated, we can help you determine whether you may be able to pursue damages. If you are an employer or employee involved in an employment law matter, please call us at 416-481-5604 or reach us online to talk today.