Alexander v. Iron Mountain Incorporated, 2016 HRTO 1148

HUMAN RIGHTS TRIBUNAL OF ONTARIO

B E T W E E N:

Adrian Alexander

Applicant

-and-

Iron Mountain Incorporated, Joanne Forget and Daryl Westman

Respondents

DECISION

Adjudicator: Jo-Anne Pickel

Date: August 30, 2016

Citation: 2016 HRTO 1148

Indexed as: Alexander v. Iron Mountain Incorporated

APPEARANCES

Adrian Alexander, Applicant

Self-represented

Iron Mountain Incorporated, Joanne Forget and Daryl Westman, Respondents

Samantha Seabrook, Counsel

1The applicant filed an Application alleging that the respondents discriminated against him contrary to the Human Rights Code, R.S.O. c. H. 19, as amended (the “Code”).

2The parties participated in mediation offered by the Tribunal and agreed to Minutes of Settlement (“settlement”). Sometime afterwards, the applicant requested that the Tribunal nullify, or set aside, the settlement and permit him to go forward to a hearing. The Tribunal held a preliminary hearing to address the applicant’s request. At the preliminary hearing, I heard testimony from the applicant. I advised the parties that I would only hear testimony from other individuals if it was necessary in order to reach a decision in this case.

3I find that I do not need to hear testimony from any additional witnesses. Based on the evidence and submissions at the hearing, I find that the applicant’s request must be denied. I have considerable sympathy for the applicant’s life circumstances, however, even if I were to accept his testimony as credible and reliable, this testimony does not meet the high threshold required to nullify a settlement.

Factual Background

4The applicant was employed by the respondent as a truck driver from 2001 until 2012. In or around February 2004, the applicant developed a work-related injury and began receiving benefits through the Workplace Safety and Insurance Board (“WSIB”). The WSIB found that he had certain permanent impairments and accepted him into a work transition program.

5In or around November 2012, the respondent offered the applicant a severance package which, among other things, included a lump sum severance amount as well as the continuation of his health, vision and dental benefits for a period of one year. However, the applicant did not agree to this severance package. In December 2012, the respondent terminated the applicant’s employment for frustration of contract. It provided him with the termination and severance pay required under the Employment Standards Act, 2000, S.O. 2000, c. 41 (“ESA”).

6Following his termination, the applicant applied for a number of other positions with the respondent but was not hired. In his Application, he alleged that the respondents discriminated against him because of disability when they terminated his employment and when they did not hire him for other positions within the company.

7On September 11, 2014, the parties participated in mediation offered by the Tribunal. The parties exchanged settlement offers back and forth. In cross-examination, the applicant confirmed that he had put forward the offer that ultimately led to the settlement when it was accepted by the respondents. The respondents’ counsel drafted the settlement which was signed by the applicant and a representative of the respondents.

8The settlement states that the parties wished to resolve:

all outstanding differences arising from the Applicant’s employment with Iron Mountain, the termination of the Applicant’s employment, and any other issues raised in the Application.

9Under the terms of the settlement, the corporate respondent agreed to pay the applicant a lump sum amount. The settlement states that this amount was paid:

in full and final settlement of any and all claims related to the Applicant’s employment with Iron Mountain and/or the termination of that employment, including any matters that were raised or which could have been raised against Iron Mountain in the Application.

10The lump sum was divided into two payments:

a. a lump sum payment to be characterized as general human rights damages; and

b. a lump sum payment to be paid as a retiring allowance. This payment was subject to any applicable statutory deductions, such as taxes.

11In exchange for these two payments, the applicant agreed to sign the Release and Indemnity form attached to the settlement. By doing so, he released the respondents from any future claims in any way related to his employment or the termination of his employment.

12The applicant also signed a declaration that was attached to the settlement confirming that he did not receive any Employment Insurance (“EI”) benefits after the termination of his employment. The declaration states that the applicant would reimburse the respondents for any amount they might owe to the federal government if it turned out that he had in fact received EI benefits after his termination.

13At the mediation, the parties filed a Confirmation of Settlement (Form 25) and the Tribunal closed its file for the Application.

14A few days after signing the settlement, the applicant discussed the terms of the settlement with his son. He testified that his son told him “that’s all you got? You signed away your benefits, lost wages and right to recall”.

15Shortly after this discussion, the applicant contacted the Tribunal and sometime later he filed a request to nullify the settlement.

applicable law

16A settlement is a legal contract. Most litigation ends in settlements. To be effective, settlements must be final. Otherwise, parties would have no incentive to enter into settlements to end litigation. It is primarily for this reason that the law sets a high threshold that must be met by a party who wants to nullify a settlement they agreed to. The issue I must decide is whether the applicant has met this high threshold.

17The applicant argued that the settlement should be set aside for two reasons: (1) that he did not understand what he was signing; and (2) that the mediator acted in bad faith and pressured him into signing the settlement.

applicant’s Lack of understanding

Applicant’s evidence

18The applicant claimed that the settlement should be nullified because he did not understand what he was signing.

19At the preliminary hearing, the applicant testified that he has cognitive disabilities that affect his ability to understand things and his memory. He sought to rely upon medical evidence going back to 2012 that shows that he has various cognitive difficulties which makes it difficult for him to maintain attention and to read and understand written materials. According to the applicant, when he and the mediator were reviewing the settlement, he told her several times that he has ADD (Attention Deficit Disorder) and that he did not understand what he was signing.

20When I asked the applicant at the preliminary hearing how the mediator responded, he said that she told him that he was agreeing that he would be paid the amount agreed to in two cheques. She then asked him whether he had received EI benefits. When he said no, she told him that if he did receive EI it would be deducted from the settlement. According to the applicant, the mediator then flipped through various pages of the settlement quickly.

21I note that, although the settlement is eleven pages long, the key terms of the settlement are set out in just three pages of the settlement. The first page of the settlement is simply a cover page, pages 2-4 contain the key terms of the settlement, page 5 is a signature page, pages 6-8 contain a release, page 9 is a signature page for the release, page 10 is the EI declaration discussed above and page 11 is a cover page for the Tribunal’s Confirmation of Settlement form (Form 25).

22On cross-examination, the applicant conceded that he knew he did not understand all parts of the settlement at the time he signed it but that he signed it anyways. When asked in cross-examination why he signed a settlement he did not understand, the applicant said that he signed the settlement because he needed money at the time. The applicant also confirmed that he knew he would have the right to have a hearing if he did not agree to the settlement. In fact, he said that the mediator told him several times that he might get nothing if he went forward to a hearing. When I asked the applicant whether he thought that he was forbidden from taking the settlement away and think about it, he said, no, he did not think he was forbidden from doing so.

23I asked the applicant whether he understood that he would be receiving the amounts set out in the agreement. He confirmed that he did understand that he would be receiving those amounts. However, he questioned why he would agree to the amount he agreed to since it represented only about a third of what he had asked for in his Application. When I asked the applicant what he expected to receive from the settlement that he did not receive, he testified that he did not realize that he was “signing off on his benefits”, lost wages and his right to go back to work for the respondent. I then asked the applicant why he expected to continue to receive benefits if his employment with the respondent was terminated. He testified that, upon his termination, he had asked a representative of the respondent whether he could continue to receive benefits. The representative told him that he would have to contact the insurer to see whether it was possible for him to pay the premiums to continue his benefits. The applicant was not sure whether he ever did speak to someone from the insurer. However, he later submitted a claim for dental benefits which was approved. From this, he said he assumed that his benefits would be continued. In addition, the applicant testified that he had heard that sometimes employees would get severance packages that included benefits.

24When I asked the applicant whether he had cashed the cheques sent to him by the respondents, he said he had. He said that he held onto the cheques for a couple of weeks but eventually cashed them. He said that one of the cheques had taxes taken off it and he thought that he should cash it since the income had already been reported to the tax authorities. He conceded that he also cashed the second cheque which did not have any taxes taken off of it.

Findings

25As stated above, a settlement is a legal contract. Legal contracts are only set aside if it can be shown that there are legally valid reasons for doing so. The Tribunal has stated in the past that an applicant needs to meet a high threshold to establish that he or she did not appreciate the significance of signing a settlement due to a mental illness or disability. See Kerkezian v. Donway Place Retirement Home, 2012 HRTO 1581 at para. 26 (“Kerkezian”). As well, the Tribunal’s caselaw makes clear that the issue of whether an applicant was incapable of understanding a settlement is distinct from the issue of whether an applicant actually understood the settlement. See Kerkezian at para. 20. An applicant cannot rely upon their lack of understanding of a settlement as a reason to nullify it if they do not take all necessary steps to ensure they understand it before signing it.

26Even if I accept that the applicant has certain permanent cognitive impairments that affect his attention, reading, comprehension and memory, the medical evidence falls short of establishing that he lacked the legal capacity to understand the settlement or the consequences of signing it. The applicant testified at the hearing that he had negotiated back and forth with the respondents. He also conceded that it was one of his offers that ended up forming the settlement when it was accepted by the respondents. He had the capacity to know he did not understand parts of the settlement but he signed it anyway. He knew it was open to him to take the settlement away and think about it before signing it. He also knew that he had the right to turn down the settlement and go forward to a hearing. Based on all the above, I find that the applicant has failed to establish that he lacked the legal capacity to understand what he was signing and the consequences of signing it. Taken at is highest, the applicant’s evidence was that he did not understand what he was signing but he signed the settlement anyway because he needed the money. This is not a legally valid reason to nullify a settlement.

27In addition, the applicant’s testimony leads me to conclude that the applicant did understand the key parts of the settlement and that the mediator explained the key parts of the settlement to him. Based on his testimony, the only parts he did not understand were ancillary (not central) to the settlement. The applicant understood he would be getting two payments for the amounts set out in the settlement and the mediator had explained this to him in response to his statement that he did not understand what he was signing. What he did not understand was the part of the settlement that dealt with the issue of EI benefits. However, the applicant had not received EI benefits so this issue is, at most, a side issue that was not central to the settlement. Also, as noted above, the settlement contained many extra pages dealing with the release and the EI issue. While it may have been better for the mediator to explain to the applicant why she was flipping through pages, I find that she did explain to the applicant the key parts of the settlement.

28Based on his evidence, the applicant’s main issue with the settlement is that he assumed that he would continue to be eligible for health, vision and dental benefits despite his termination. He assumed this because he had some dental expenses reimbursed after his termination. It is likely that the applicant’s claim for dental benefits was covered by the insurer because he submitted it during the ESA notice period following his termination. Under the ESA, an employer is required to continue to make contributions to a terminated employee’s benefit plan during their notice period. In any event, neither the respondents nor the mediator ever told the applicant he would be eligible to continue receiving health, vision and dental benefits. The applicant also did not ask the mediator whether he would be entitled to continue receiving these benefits; he just assumed that he would. An applicant’s mistaken assumption about being entitled to continue receiving benefits not referred to in a settlement is not a legally valid reason to set aside a settlement.

29At the preliminary hearing, the applicant also argued that he did not understand that he was “signing off” on lost wages and any recall rights. I cannot accept this argument. The settlement is clear that it is a full and final settlement of the Application. The amount set out in the settlement was the amount the applicant was going to get. In my view, he knew this at the time. The fact that his son thought he had not gotten enough from the deal is not a reason to nullify the settlement. Likewise, the fact that the settlement was roughly a third of what the applicant sought in his application is also not a valid reason to nullify the settlement. Applicants frequently must settle for less than they asked for in their Applications, especially when what they asked for exceeds the range of compensation that the Tribunal has awarded in its case law.

30For all the above reasons, I find that the applicant has failed to show that his cognitive disabilities made him incapable of understanding the settlement and the consequences of signing it.

alleged duress

Applicant’s evidence

31The second reason that the applicant provided for nullifying the settlement was that the mediator acted in bad faith and applied pressure on him.

32The applicant testified that the mediator told him several times that he might get nothing if he went forward to a hearing. He also testified that she looked at her watch, seemed pressed for time, and flipped through pages of the agreement very quickly.

Findings

33The fact that a party or mediator applies pressure on a person is not, by itself, a reason to nullify a settlement. A settlement will only be nullified in cases where a party can establish that they were subject to such a high degree of pressure that it amounted to duress. As with the issue of mental incapacity, the law sets a high threshold for establishing duress. In order to amount to duress, pressure must be of the kind that the law regards as illegitimate, and it must be applied to such a degree as to amount to “a coercion of the will”. See Taber v. Paris Boutique & Bridal Inc. (Paris Boutique), 2010 ONCA 157 at paras. 8-9.

34Most parties feel some pressure in the course of settlement discussions. Mediation is an exercise in encouraging parties to make reasonable compromises in order to achieve settlements. I understand that the applicant felt some pressure because the mediator told him several times that he might get nothing if he went forward to a hearing. This is a common thing that mediators remind parties of in mediation. Generally, parties expect, or hope for, the best result in their case. In almost all mediations, mediators remind applicants of the possibility that they might not be successful at a hearing and, therefore, may walk away with nothing. There is nothing illegitimate about the mediator saying this to the applicant, even if she repeated it several times.

35Similarly, even if the mediator looked at her watch or flipped the pages of the settlement quickly, this does not meet the high threshold for establishing duress or a “coercion of the will”.

36For these reasons, I find that the applicant has failed to establish that any pressure he experienced rose to the degree necessary to amount to duress.

order

37For the reasons set out above, the applicant’s request to nullify the settlement is denied. His file with respect to this Application will remain closed.