Patti McKay v. Home Depot of Canada Inc., 2010 HRTO 917

HUMAN RIGHTS TRIBUNAL OF ONTARIO

B E T W E E N:

Patti McKay

Applicant

-and-

Home Depot of Canada Inc.

Respondent

DECISION

Adjudicator: Faisal Bhabha

Date: April 27, 2010

Citation: 2010 HRTO 917

Indexed as: McKay v. Home Depot of Canada

APPEARANCES

Patti McKay, Applicant ) On her own behalf

Home Depot of Canada Inc., Respondent ) Morrie Zucker, Counsel )

1The applicant filed an Application on November 5, 2009, under s. 34 of the Human Rights Code, R.S.O. 1990, c. H.19, as amended (the “Code”), alleging discrimination in employment on the basis of age.

2The respondent filed a partial Response on February 3, 2010, requesting that the Application be dismissed without a full Response on the basis that the applicant has signed a full and final release with respect to the matter raised in the Application. By way of an Interim Decision 2010 HRTO 440, dated February 25, 2010, the Tribunal determined that it was appropriate to hear submissions and decide the respondent’s request as a preliminary matter.

3A hearing by way of teleconference was convened on April 22, 2010.

THE FACTS

4The following is based on the materials filed and the oral submissions of the parties.

5The applicant was a long-time employee of the respondent, and was promoted in April 2006 to the position of Operations Assistant Store Manager in Ajax. On January 28, 2009, the applicant was one of 215 supervisors and managers terminated as part of company-wide re-structuring. The respondent maintains that the age group of the terminated employees varied considerably, with the majority being younger than the applicant. The applicant alleges that, while the respondent did undergo massive re-structuring, other employees were offered internal transfers as an alternative to termination. She was not offered re-deployment, which she believes was because of her age. The applicant is in her 50s.

6The applicant was handed a termination letter which provided a choice: the applicant could accept 42 weeks payment by salary continuation, subject to a duty to mitigate; or, she could receive 42 weeks payment by lump sum and would also be eligible to receive a bonus payment for the 2008 fiscal year, a payment under the company’s Deferred Profit Sharing Plan, as well as extended benefit coverage until November 18, 2009.

7A key difference between these two options was that if the applicant selected the lump sum payment, she would also be expected to execute a full and final release in favour of the respondent. If she opted for salary continuation, she would not be required to execute a release.

8The termination letter provided the applicant up until February 4, 2009 to make her election. On January 30, 2009, the applicant elected the lump sum payment, signed the release, and faxed the paperwork back to the respondent.

9The applicant states that a number of personal stress factors were affecting her at the time of her termination. Her adult daughter had been viciously attacked. She and her three children were residing with the applicant, creating substantial pressures for the applicant. She stated that she was not in the “right mental state” to sign the document and that she received no advice, of a personal or professional nature, with respect to the contents of the termination package. She admitted to not reading the document thoroughly, feeling at the time that she “had no choice” and that it was a “matter of survival”.

POSITION OF THE PARTIES

10The respondent’s position is that the applicant voluntarily entered into a full and final settlement of any and all claims arising from the termination of her employment, which explicitly referenced the Code.

11Relying on Pritchard v. Ontario (Human Rights Comm.), 1999 CanLii 15058 (Ont. Sup. Ct.), respondent’s counsel argued that none of the accepted factors for consideration when determining whether to override a release were present in this case. Counsel argued that the applicant clearly understood the significance of the release; while she may have changed her mind and came to regret her decision, there is no indication that she was incapable of understanding what she signed at the time.

12Further, counsel argued that the terms of the minutes of settlement provided the applicant with compensation well in excess of her ESA entitlements. Counsel also argued, contrary to the applicant’s claims, that there is no evidence of economic or emotional duress.

13The applicant took the position that she did not fully understand the impact of signing the release. Further, she stated that after taking some time to think about her termination, she grew to believe that it must have been based on her age. She reached this conclusion because she was a strong performer and yet was not offered a re-deployment, while other, younger employees were provided the opportunity to stay with the respondent.

ANALYSIS AND DECISION

14It is important to stress that this case is not yet being decided on the merits. I have not considered evidence as to the allegations of discrimination made by the applicant. The question at this preliminary stage is simply whether it would be an abuse of the Tribunal’s process, considering all the circumstances, to allow the Application to proceed to a hearing, and to require the respondent to defend against the allegations of discrimination.

15First, it is necessary to consider whether the release at issue encompassed claims under the Code. The release provided as follows:

I hereby RELEASE and forever discharge Home Deport of Canada Inc. (including its officers, employees and agents) of and from all demands, suits, debts, claims, complaints and actions, of every nature and kind, whether under statute (including any claims or complaints under employment/labour standards legislation or human rights legislation), contract or common law in any way related to my employment or the termination of my employment. [Emphasis in original]

16I have no difficulty finding that this release clearly encompassed existing or prospective claims brought under the Code. However, accepting that the release expressly contemplated legal action related to human rights does not end the enquiry. In Bielman, the Tribunal stated:

The Code does not explicitly bar applications such as this where a release has been signed by the applicant. In each case where a respondent requests early dismissal of an application, the Tribunal must decide whether, in the circumstances, it would constitute an abuse of the Tribunal’s process to allow the application to proceed to a hearing on the merits. An important consideration in that analysis is the respondent’s reasonable expectation that a release of this kind will bring finality to any employment related dispute they may have with a former employee.

17Thus, while the existence of a full and final release is not a bar, there are many reasons to uphold agreements reached between freely contracting parties. Failure to uphold such agreements, and to hold parties to their commitments, can undermine the integrity of negotiated settlements and hinder the timely and informal resolution of disputes.

18The factors outlined in Pritchard, supra are helpful in determining whether overriding a release would constitute an abuse of the Tribunal’s process. These factors look to (1) whether the applicant fully understood the significance of the release; (2) whether she received sufficient and fair consideration for signing the release; (3) evidence of economic pressure; and (4) evidence of psychological or emotional pressure amounting to duress.

19I do not find that any of the Pritchard factors have been established in this case.

20I have no doubt the applicant faced a difficult choice at a difficult time in her life. Regret resulting from a hard decision is not sufficient to override a freely-executed, binding contract. It is to be expected that most, if not all, employees facing the termination of their employment will endure some degree of financial and emotional insecurity, and will feel pressures of various kinds, but especially about money. However, the case law is clear that economic pressure alone is not sufficient to set aside a release: Sinnett v. Orlick Industries, 2009 HRTO 916, at para. 24.

21Similarly, while the applicant may have been under considerable emotional pressure, this does not meet the standard of “duress”. The Tribunal has required evidence of “improper pressure” or “coercion” to establish duress. See Kailani v. Securitas Canada, 2009 HRTO 1183 at para. 30; Parma v. Stoney Creek Lifecare, 2010 HRTO 501 at para. 31. There is no indication that the applicant’s signing of the release was involuntary. Although she did not have independent counsel, she did have the opportunity to seek the advice of a solicitor and chose not to.

22Looking at the circumstances as a whole, there are no factors that would lead the Tribunal to set aside the terms of the settlement. The terms of settlement were just and fair and, importantly, provided the applicant with two choices, one of which did not require her to sign a release and would have allowed for the continuation of her salary and benefits. For reasons of her own, she opted for a lump sum and willingly signed the release. While she may have come to regret this choice later, that is not sufficient to unravel a fully and fairly concluded deal between the parties, which expressly resolved all matters between them, including her claims under the Code.

23The Application is accordingly dismissed.