Marinovic v. Pottinger Gaherty Environmental Consultants Ltd., 2017 HRTO 1086

HUMAN RIGHTS TRIBUNAL OF ONTARIO

B E T W E E N:

Cindy Marinovic

Applicant

-and-

Pottinger Gaherty Environmental Consultants Ltd.

Respondent

DECISION

Adjudicator: Dawn J. Kershaw

Date: August 18, 2017

Citation: 2017 HRTO 1086

Indexed as: Marinovic v. Pottinger Gaherty Environmental Consultants Ltd.

APPEARANCES

Cindy Marinovic, Applicant

Stephan Marinovic, Representative

Pottinger Gaherty Environmental Consultants Ltd., Respondent

Julia Nanos, Counsel

Introduction

1This Application, filed August 16, 2016, alleges discrimination with respect to employment because of family status contrary to the Human Rights Code, R.S.O. 1990, c. H.19, as amended (the “Code”).

background

2The applicant worked for the respondent and was terminated while on maternity leave. The respondent advised the applicant three months before the end of her maternity leave that she would be terminated on the day she was scheduled to return.

3The applicant alleges that while the respondent alleges it was restructuring, in fact she and other new parents were terminated because the respondent thought new parents could not work long hours. The applicant alleges she subsequently learned that her position was not eliminated.

4The respondent alleges the terminations took place because of declining business.

5It offered the applicant an enhanced severance package exceeding her statutory entitlement. To get the package, the respondent told the applicant she had to sign a release within 5 days. About three months after she signed it, she filed this Application.

6The respondent takes the position the applicant cannot proceed with the Application because of the signed release. Paragraph 1 of the release states in part that the applicant releases the respondent from:

[a]ny and all actions, causes of action, suits, claims and demands of every nature or kind, statutory, contractual, common law or otherwise, which have existed, exist now or may in the future exist by reason of any matter or thing existing as of the date hereof with respect to or arising out of my hiring by PGL [the respondent], my employment with PGL and the termination of that employment, including, without limiting the generality of the foregoing, any claims for wages, vacation pay, holiday pay, bonus payments, commissions, right to reinstatement, short-term disability benefits, long term disability benefits, other benefit entitlements, notice of termination or payment in lieu of notice, severance pay, or any other employment benefit whatsoever whether arising pursuant to contract, common law, statute, including without limitation, the Employment Standards Act (Ontario) and the Human Rights Code (Ontario) and related legislation, or otherwise (all of which are hereinafter referred to as the “Matters”.

7Paragraph 2 of the release states:

I agree not to make any claim or demand, or comment, maintain or prosecute any action, cause or proceeding for damages, compensation, loss or any relief against any of the Releasees in respect of any cause, matter, or thing arising out of, or relating to the Matters or any other person who might claim contribution or indemnity from any of the Releasees. I further agree that this Release shall operate conclusively as an estoppel in the event of any such claim, action or proceeding and may be pleaded accordingly.

8Paragraph 3 of the release states:

I hereby acknowledge that I have not been subject to any discrimination or harassment during the course of my employment with PGL and that it has been agreed that the said consideration constitutes full and final settlement of any existing, planned, or possible complaint(s) I may have against PGL under Ontario Human Rights Code.

9The Tribunal issued a Case Assessment Direction directing a preliminary hearing to decide whether the Application should be dismissed as an abuse of process on the basis that the applicant signed a release that the respondent alleges dealt with the subject matter of the Application. This is my decision with respect to that preliminary issue.

parties’ submissions

Applicant’s Submissions

10The applicant takes the position that she should be permitted to proceed with this Application for the following reasons:

a. There was an imbalance of bargaining power between the applicant and the respondent;

b. She signed the release under duress;

c. She did not have independent legal advice prior to signing the release;

d. The respondent misrepresented the facts surrounding her termination; and

e. The release should not cover the time period after May 12, 2016 when she signed the release because the respondent’s discrimination continued after that time.

11The applicant argues the release should be set aside because of the imbalance of bargaining power between her and the respondent.

12The applicant submits she was under duress when she signed because she had only 2 ½ business days to get independent legal advice. She submits that though she and her husband called a few lawyers, only one gave them some general advice and did not have time to meet with them.

13The applicant says the respondent also insinuated she would not get severance if she did not sign the release.

14She further alleges she was coerced into signing the release because the respondent used threatening language when it told her she had to be careful how she handled the issue because it was a small industry. Her duress was compounded by the fact that she and her husband had a newborn and were both terminated on the same day. In addition, she and her husband were planning a wake for the weekend to mark the anniversary of the passing of the applicant’s husband’s father.

15The applicant further takes the position the respondent misrepresented the facts surrounding her termination by telling her the position would not exist three months later when the termination was effective, which she believed. She states she later discovered the work was still there but was being done by others, and says that because her work was still there the respondent could have placed her back in her former job or a similar one at the end of her maternity leave. The applicant also argues that the fact she was not returned to her former job at the end of her maternity leave constitutes discrimination not covered by the signed release, and the release is unenforceable against her future rights.

Respondent’s Submissions

16The respondent argues there are two issues in this preliminary hearing:

a. Whether the release covers the allegations in the Application; and

b. Whether there are any compelling reasons to set aside the release.

17The respondent submits the release covers the allegations in this Application and therefore bars the Application.

18It submits the signed release clearly states that the applicant releases the respondent from all matters existing at the date of signing the release, in exchange for which the applicant received 12 weeks of salary, significantly more than her entitlement under the Employment Standards Act (“ESA”). The respondent points out that paragraph 3 of the release clearly states that the applicant acknowledges there were no human rights violations during her employment. The respondent submits nothing turns on the fact that the applicant’s termination date was three months after she signed the release because the applicant knew all the relevant facts when she signed it.

19The respondent further argues there are no compelling reasons to set aside the release. First, the respondent submits that in its letter it clearly told the applicant she statutorily was entitled to 3 weeks’ notice or pay in lieu of notice though the respondent offered 12 weeks.

20The respondent further argues the applicant obtained legal advice. It points to an e-mail from the applicant’s husband in which he advised prior the applicant signing the release that he had consulted a lawyer who gave him advice with respect to the severance amounts for both him and the applicant. He also requested a letter of reference for his wife and some amendments to her agreement, including the addition of a non-disparagement clause. In response, the applicant denies the lawyer reviewed the documents. He says he was bluffing in the e-mail and only asked the lawyer about his own agreement.

21The respondent argues with respect to any imbalance of power that while there is always some imbalance of power between employers and employees that alone does not mean the release is unenforceable.

22The respondent further submits the applicant does not meet the high bar for setting aside a release because of economic pressure. The applicant was under stress, but it did not amount to a coercion of her will. The respondent points out that in his e-mail to the respondent the applicant’s husband did not ask the respondent on behalf of his wife for more time to review the release, but instead imposed a deadline on the respondent to advise him if there was room to negotiate.

23The respondent also disagrees with the applicant’s submission that it misled the applicant respecting the elimination of her position. It maintains there was a restructuring and this was a bona fide business decision. The applicant does not disagree there was a slowdown in business, but submits she should have been returned to her former position at the end of her maternity leave.

24Finally, the respondent argues that contrary to the applicant’s submission, there was no discrimination after the applicant signed the release, and therefore the Application should be dismissed.

analysis and decision

25The Code does not explicitly bar applications where an applicant has executed a release in favour of a respondent. See, Bielman v. Casino Niagara, 2009 HRTO 123. However, the Tribunal may, in accordance with its Rules of Procedure, determine that allowing an application to proceed in such circumstances amounts to an abuse of process.

26In Better Beef Ltd. v. MacLean, 2006 CanLII 17930 (ON SCDC), at paras. 46-48, the Divisional Court confirmed that where “the literal and ordinary meaning of the release” demonstrates a clear intention on the part of the parties to fully and finally release the respondents from all claims, it should not be easily disturbed.

27The decision in Pritchard v. Ontario (Human Rights Comm.), 1999 CanLII 15058 (ON SC) (“Pritchard”), outlines criteria for departing from that principle. The factors in Pritchard are (1) whether the party fully understood the significance of the release; (2) whether the party 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.

28I turn first to the issue of consideration. I find the applicant received an amount in excess of her statutory entitlement under the ESA. In any event, it is not the Tribunal’s role to assess the appropriateness of a settlement the applicant entered into. See, Dickson v. General Motors of Canada Limited, 2013 HRTO 1347 (“Dickson”) at para. 33 and O’Regan v. Firestone Textiles, 2010 HRTO 502 at para. 3, subpara. 18. There is no reason to set aside the release on this basis.

29With respect to duress, the Ontario Court of Appeal described the elements of economic duress in Taber v. Paris Boutique & Bridal Inc. (Paris Boutique), 2010 ONCA 157, as follows at paras. 8-9:

There is no doubt that economic duress can serve to make an agreement unenforceable against a party who was compelled by the duress to enter into it. Nor is there any doubt that the party can have the agreement declared void on this basis.

However, not all pressure, economic or otherwise, can constitute duress sufficient to carry these legal consequences. It must have two elements: it must be pressure that the law regards as illegitimate; and it must be applied to such a degree as to amount to “a coercion of the will” of the party relying on the concept.

30I accept the applicant was under considerable financial pressure because she was no longer employed, compounded by her husband losing his job the same day. However, it is common for an employee to face some form of financial pressure as a result of a loss of employment. I do not find the reasons the applicant gave amounted to a coercion of her will, nor was there anything to support the proposition that any pressure on her was illegitimate. While the applicant submits the respondent told her she would have to be careful how she handled this because it was a small industry and she felt she had to sign to get her severance, these are not reasons to set aside the release. There is no evidence that the first statement is anything more than a fact. The second is belied by the fact that the respondent’s letter clearly sets out the applicant’s ESA entitlement.

31The applicant made no submissions that evidenced any indication that she could not make choices for herself when she signed the settlement agreement and release. In addition, it appears she had some form of independent legal advice in light of her husband’s email that included the number of weeks’ severance the lawyer expected given the applicant’s length of service. The respondent also told the applicant to obtain independent legal advice, and the applicant did not ask for more time to do so. Instead through her husband she attempted to negotiate a better deal for herself. Although King v. Ontario (Health and Long-Term Care), 2011 HRTO 2228 refers to settlements at the Tribunal, the reasoning applies equally to other settlements. The Tribunal stated in at para. 23:

Parties do generally feel some pressures in the course of litigation, including as they engage in settlement discussions. […] [T]he legal threshold for duress is a high one.

32I find the applicant has not met the high threshold to establish duress.

33With respect to the notion that the applicant should not be held to her release because her termination did not take effect until three months later, there is no validity to that position. The applicant clearly understood the respondent was terminating her and she signed a release in order to get compensation. The effective date of the release has no bearing on the issues.

34The applicant argues she had new information by the time her termination took effect, and argues that in fact her position was not eliminated. I do not accept this as a reason to set aside the release in this case. It is true that a release can be set aside if one party deliberately misleads another, thereby inducing that party into entering into an agreement. See, e.g. Wedderburn v. Air Liquide Canada, 2010 HRTO 691, citing 1018429 Ontario Inc. v. Fea Investments Ltd., 1999 CanLII 1741 (ON CA), 179 D.L.R. (4th) 268 at para. 51. However, I do not accept that was the case here. In this case, even the applicant accepts there was a slowdown in business. The fact that others assumed her duties is not evidence that there was no restructuring. There also was no dispute that she was one of four or five employees who were also let go. There is nothing before me to suggest that the respondent misled the applicant or that the restructuring was not bona fide.

35Finally, there is no merit to the applicant’s argument that a new act of discrimination occurred three months after she signed the release because she was not returned to her former position at the end of her maternity leave. It is a circular argument to suggest that she could sign an agreement and release in relation to her termination, but then could consider it a new act of discrimination that she was not returned to her former position at the end of the three months in light of the fact that she signed an agreement and release.

36In summary, there is no basis to conclude that the release as part of the settlement agreement was signed under duress and should therefore be set aside. Because the release provides for a full and final settlement of any claims arising directly or indirectly out of the applicant’s employment with the respondent, it would be an abuse of process to allow this Application to continue in the Tribunal’s process.

order

37The Application is dismissed.