P-2007-0665

IN THE MATTER OF AN ARBITRATION

Under

THE PUBLIC SERVICE ACT

Before

THE PUBLIC SERVICE GRIEVANCE BOARD

BETWEEN

Antoncic

Grievor

• and -

The Crown in Right of Ontario (Ministry of Community Safety and Correctional Services)

Employer

BEFORE

Kathleen O’Neil

Vice-Chair

FOR THE GRIEVOR

Marc A. Munro Counsel Graydon Sheppard B.A. LL.B.

FOR THE EMPLOYER

Paul Meier Counsel Ministry of Government Services

HEARING

November 17, 2008.

Decision

1This decision deals with the question of whether the grievor, Nicholas Antoncic, has breached the terms of a Memorandum of Settlement, dated July 20, 2007, which settled his grievance concerning his dismissal for cause. The employer claims that the grievor has breached that agreement in a number of ways, notably by launching a civil action against two civil servants for conspiracy and defamation. A preliminary decision giving my reasons for finding that I had jurisdiction over the dispute was issued on October 10, 2008. A hearing was then convened to hear the main issue. At that time, the parties agreed to deal only with the question of whether the minutes of settlement had been breached and to leave the dispute as to what remedy should follow, if a breach were found, to a later time.

2The evidence necessary to this decision was introduced mostly by way of filing documents on consent. Two letters from the grievor to the Minister of Corrections and the Attorney General dated October 27 and 30, 2007, respectively, were admitted over the objection of counsel for the grievor as arguably relevant to the meaning of the grievor’s suit against his former colleagues. There is little dispute about the facts necessary to this decision; it is the question of whether they constitute a breach of the settlement which divides the parties.

3Prior to his dismissal on September 25, 2006, the grievor was employed as a Staff Relations Manager with the Ministry. The dismissal followed an investigation into a number of allegations, including that Mr. Antoncic had improperly released a Staff Relations Officer, a probationary employee. This employee alleged that his release was a reprisal for the fact that the Staff Relations Officer was involved in a personal relationship with a woman, also a Ministry employee, with whom the grievor had earlier been similarly involved. It is this couple that Mr. Antoncic has sued for defamation and conspiracy. Prior to signing the minutes of settlement here in dispute the grievor had asserted , in correspondence to the employer on various occasions, and/or in the grievance filed with this Board, that some of the information relied on by the investigator, including from the couple, was fabricated, tailored, incorrect, incomplete and/or deliberately misrepresentative. As well, according to notes prepared by Mr. Antoncic’s former counsel for a meeting with the employer on February 8, 2007, the grievor had received the complaint made about him by the released Staff Relations Officer by August 31, 2006 when Mr. Antoncic was suspended from employment pending the completion of the employer’s investigation. When he agreed to the Minutes of Settlement at a mediation session at the Board, Mr. Antoncic was represented by his former counsel.

4In the statement of claim dated December 20, 2007, Mr. Antoncic asserts that the defendants conspired to advance false allegations to discredit him and undermine his employment, and that they communicated false statements to the employer and the investigator, injuring his reputation and causing him distress and embarrassment, and leading to his termination.

5In his letter to the Minister of Community Safety and Correctional Services, Rick Bartolucci, dated October 27, 2008 Mr. Antoncic wrote: “As a direct consequence of my dismissal, I commenced a civil action for defamation against two (2) Ministry employees”, and that since then, government officials had “engaged in a concerted, sustained and improper effort to thwart the advancement of my claim or damages against the defendants” in order “to suppress the release of information regarding…systemic financial mismanagement, abuse of the public trust…and other irregularities which will become part of the public record during the course of my civil action.” He further indicated he would be cooperating with members of the press interested in his case. His letter to Attorney General, Chris Bentley, dated October 30, 2008 makes similar statements.

6The portions of the confidential agreement between the grievor and the Ministry most pertinent to this decision are the following:

WHEREAS the Grievor has filed a grievance under the Public Service Act with the PSGB dated May 28, 2007, and whereas this grievance bears the file # 2007-0665;

AND WHEREAS the Parties wish to resolve the aforementioned matter and any and all outstanding matters relating to the Grievor’s employment on a without prejudice and precedent basis and without any admission of liability or wrongdoing on either Party’s part;

NOW THEREFORE the parties agree to the following terms and conditions as full and final resolution of the above captioned grievance and all other outstanding individual grievances, complaints, claims and matters regarding the Grievor’s past employment:

1.The Grievor agrees that the above captioned grievance, and any and all outstanding grievances pertaining to the Grievor’s employment, is hereby withdrawn. The Grievor further agrees to inform the Public Service Grievance Board (“PSGB”) of their withdrawal;

2. [The employer agreed to pay the grievor a sum of money.]

3.The parties agree that as consideration for the payment in paragraph 2 above, the Grievor shall have no additional claim for payments of salary, benefits, severance, termination pay or benefits of any other kind arising from his employment with the Employer;

6. The Parties agree to keep the terms and conditions of this agreement confidential except as otherwise required by law and for the purposes of implementation of this settlement;

7. The Grievor further agrees to keep confidential any and all matters and information obtained, discovered or learned of, directly or indirectly, during the course of his employment with the Employer. Such confidentiality shall be protected by the Grievor and considered a vital term and condition of this agreement;

8. The Grievor further acknowledges his post-employment duties and obligations flowing from his Oath of Office and Secrecy as set out in the Public Service Act and its regulations, and any future enactment and the regulations promulgated thereunder. Such duties and obligations are not exhaustive and would include any additional duties and obligations at common law;

9. The Parties further agree that neither shall make disparaging remarks regarding the conduct of the other;

10. The Grievor agrees to irrevocably instruct his Counsel to return any and all materials disclosed by the Employer through its Counsel, and in particular the disclosures made under covering letters dated December 8, 2007 and December 21, 2007. Such irrevocable instruction shall be made upon the signing of this agreement. …[Note: the parties agreed at the hearing that the letters mentioned in this paragraph were actually dated in 2006 rather than 2007. Nothing turns on the typing error in the date in any event.]

11. The Grievor hereby agrees to release and forever discharge the Employer and the Crown in Right of Ontario from any and all grievances, claims, complaints, actions or causes of action respecting the Grievor’s employment and cessation of employment, including under the Employment Standards Act, Human Rights Code and any related statutes. In addition, the Parties agree and acknowledge that payment of the sum identified in paragraph 2 is inclusive of and exhaustive of all possible entitlements, statutory or otherwise, to severance pay on termination or pay in lieu of reasonable notice or damages whether pursuant to the Public Service Act, to any heads of damage under the Ontario Human Rights Act, and under any other Statute or common law;

14.The parties agree that this memorandum of settlement constitutes the entire agreement between the parties and supersedes all oral or written agreements arrangements, representations or understandings between the parties;

15. The Grievor agrees that he is fully informed of and understands the consequences of this settlement and, accordingly, he enters into it voluntarily;

16. The parties agree that Vice-Chair K. O’Neil shall remain seized of the matter for the sole purpose of overseeing the effective implementation or resolving any breach of the terms and conditions of this settlement.

7The thrust of the employer’s position is that the Minutes of Settlement amount to an agreement that all disputes related to the grievor’s employment were settled, and that the grievor’s lawsuit is an attempt to resurrect a dispute which was central to the settled grievance, in contravention of the Minutes of Settlement. Employer counsel asks for a declaration that the grievor has breached paragraphs 7, 9, 10 and 12 of the Minutes of Settlement. The following case law is relied on in support: McIntyre v. Connolly, [2008] O.J. No. 1097 (O.S.J.), Toronto District School Board v. Ontario Secondary School Teachers’ Federation (re McIntyre), unreported decision dated April 5, 2007, (Arbitrator Shime), London Drugs Ltd. v. Kuehne & Nagel International Ltd., 1992 CanLII 41 (SCC), [1992] 3 S.C.R. 299, cited to 1992 CanLII 41 (S.C.C.), OPSEU (Clarke) and Ministry of Natural Resources, (March 11, 2003) GSB # 0260/98, etc., (Brown), A Co. v. Naster, [2001] O.J. No. 4997, Disher v. Kowal, 2001 CanLII 28010 (ON SC), [2001] O.J. No. 4184 (O.S.J.) —2001 CanLII 28010 (ON S.C.) and OPSEU (Young) and The Crown in Right of Ontario (Ministry of the Attorney General), (January 23, 2004), GSB # 2001-0660, (Abramsky) .

8By contrast, the grievor’s position is centered on the fact that the defendants in the lawsuit were not parties to the settlement and not covered in the release clause. It is asserted that the grievor accepted the agreed compensation in lieu of reasonable notice, and executed the settlement because it was expressly limited in scope to the employer and the Crown. As a result, it is argued that the lawsuit does not breach the settlement. Counsel for the grievor maintained that the employer is asking that wording be implied into the release clause which it failed to negotiate. As in Gabriel v. Hamilton Tiger- Cat Football Club Ltd. (1975) 1975 CanLII 532 (ON HCJ), 8 O.R. (2d) 285, counsel invites a finding that the wording of the contract is unambiguous and should be applied as negotiated. Referring to Eli Lilly & Co. v. Novopharm Ltd., 1998 CanLII 791 (SCC), [1998] 2 S.C.R. 129, counsel submits that, in the absence of ambiguous language, extrinsic evidence, such as of one party’s intention, or the surrounding circumstances, cannot be relied upon. Moreover, it is the grievor’s position that the lack of privity of contract with the defendants in the civil suit prevents them from benefiting from the Minutes of Settlement.

9Referring to excerpts from the text The Law of Releases in Canada by Fred D. Cass, counsel for the grievor submits that the release of the Crown and the employer does not release the individual defendants in the civil suit, and refers to Morgan v. Saskatchewan, (1985) 1985 CanLII 2666 (SK CA), 43 Sask. R. 129 in support. Referring to Consolidated Mining and Smelting Co. of Canada v. Murdoch 1928 CanLII 503 (SCC), [1929] SCR 141, (S.C.C.) counsel invites a finding that the employer is complaining about behaviour that is analogous to an accident in the employer’s parking lot, or a fight in the hall, not something that arose in the course of employment, in that defamation cannot be part of the grievor’s job description.

10As to the employer’s allegation concerning the breach of the confidentiality provisions in paragraph 7 of the Minutes of Settlement, grievor’s counsel argues that it is overbroad, and should be considered void for vagueness. If interpreted literally, and together with the non-disparagement language in the way the employer argues, he submits, the grievor’s right to free speech would be infringed, and he would never be able to engage in political discourse.

11Both counsel spent considerable time on whether or not the information disclosed to the grievor prior to the settlement was subject to a deemed undertaking, and whether that in itself should indicate that the settlement was breached. This included the argument on behalf of the grievor that the employer’s specific invocation of the deemed undertaking in its covering letters forwarding disclosure had not been adopted by counsel for the grievor, and was superseded by the language of the Minutes of Settlement providing that its terms were the “entire agreement”. Further, counsel for the grievor argued that third parties such as the defendants in the law suit should not be given the benefit of the deemed undertaking rule, relying on Temelini v. Canada Permanent Trust Co (2005) 21 C.P.. (6th) 179.. Although I accept that, as set out in A Co. v. Naster, cited above, the deemed undertaking rule applies in proceedings before administrative tribunals, I do not find it necessary to deal with this dispute in that context, as the wording of the Memorandum of Settlement is sufficient to determine the question before me. Further, any question concerning what benefit the defendants may derive from the deemed undertaking rule in the civil suit is a matter of the interpretation of the rule for the Court.

12Further, counsel for the grievor submitted that, given that the jurisdiction of the Public Service Board is limited to the wrongful dismissal claim, the grievor’s claim in tort against the defendants could not be remedied by this Board by damages for defamation and conspiracy in any event. In this respect, he argued that the claim for damages in the law suit was not a claim for double recovery as argued by the employer, since damages for wrongful dismissal are distinct, intended to compensate for lack of notice, and not aimed at remedying the damage to reputation on which the tort claim is based.

13The central question to be determined is whether Mr. Antoncic has breached the Minutes of Settlement by launching an action for defamation against his former colleagues. I have considered all the detailed arguments made, orally and in writing, as well as all the material filed, including the extensive case law. In the view I take of this matter, the issue can be resolved in a straightforward manner, and does not require an extensive analysis of the authorities. The issue before me depends on the interpretation of the Minutes of Settlement in their entirety, including, but not limited to, the release portion of the document, found in the first sentence of paragraph 12. When read in its entirety, the language of the settlement document clearly communicates that the parties were settling “all outstanding matters relating to the Grievor’s employment”. It was not just a resolution of the grievance that he had been wrongfully dismissed; it was also a “full and final resolution of … all other outstanding individual grievances, complaints, claims and matters regarding the Grievor’s past employment.” As a result, the basic question to be answered is whether the civil suit is a claim or matter “regarding the grievor’s past employment”. In my view, it is very clear that it is. The thrust of the statement of claim is that the defendants made false statements about the grievor’s conduct during his past employment as a staff relations manager. The employment context permeates the grievor’s pleading, and it is specifically alleged in the civil suit that the defendants’ conspiracy and disparaging remarks lead to the investigation of Mr. Antoncic’s alleged improper conduct and his discharge from his employment. Further, it specifically claims damages for economic loss as a result of his termination. In all these aspects, it is both a claim and a matter regarding the grievor’s past employment.

14In this regard, it was argued on behalf of the grievor that the employer did not insist on the inclusion in the settlement of what counsel referred to as “the other issues swirling around” at the time of Mr. Antoncic’s discharge. As well, he submitted that what he referred to as a “a standard release clause” reciting a release of all employees and servants would have been necessary to achieve the result for which the employer argues.

15Further, counsel referred to the jurisprudence flowing from Weber v. Ontario Hydro 1995 CanLII 108 (SCC), [1995] 2 S.C.R. 929 to support his argument that defamation and conspiracy are not part of the jurisdiction of the Board, and that the employer would have objected if the grievor had tried to claim compensation for defamation as part of his grievance. Looking at the enabling statute, and to the grievance to determine the nature of the dispute, counsel argues that, since the Board’s jurisdiction and the grievance were limited to unjust dismissal, the wording “any and all matters related to the grievor’s employment” should be interpreted to be limited to unjust dismissal. I do not find this persuasive in light of both the broad language of the third unnumbered paragraph of the Minutes of settlement, as well as the second sentence of paragraph 12, which refers to the exhaustion of “all possible entitlements” including damages at common law. This is expressed as “in addition” to the first sentence which contains the releases of the employer. As noted in the Cass text relied upon by grievor’s counsel, it is not at all unusual, or unenforceable, for parties to a settlement to include issues going beyond the specific dispute which would have been litigated if the settlement had not occurred. It is not necessary to decide what would have been the outcome if the grievor had tried to include compensation for defamation in his claims at a hearing before the Board. It is only necessary to emphasize that the grievor settled more than the claim for wrongful dismissal that he made in the grievance filed. See, in a similar vein, the GSB’s decision in Clarke, cited above. This is not a matter of implying language into the settlement document; it is a matter of giving effect to the plain meaning of the words “any and all matters relating to the grievor’s past employment” and “exhaustive of all possible entitlements”.

16In sum, given the broad language of the Minutes of Settlement, I find the civil suit to be a breach of the Minutes of Settlement, as it treats matters relating to the grievor’s past employment as unresolved, and deserving of further damages, when the settlement, on its face, was a full and final resolution of all matters relating to the grievor’s past employment. Simply put, continuing to litigate issues related to his previous employment with the Ministry is not compatible with the Minutes of Settlement the grievor signed.

17Further, the lawsuit relates to matters which were outstanding at the time of Mr. Antoncic’s termination and the Minutes of Settlement, and known to the grievor, as evidenced by his communications to the employer and the Board prior to his signing of the settlement . Although written after the signing of the Minutes of settlement, the grievor’s October 27, 2008 letter to Minister Bartolucci, makes this even more abundantly clear in the grievor’s own words:

As a direct consequence of my dismissal, I commenced a civil action for defamation against two (2) Ministry employees (Court File No. 07-35577) in the Ontario Superior Court of Justice (Hamilton) filed on December 20, 2007.

During my employment and in the capacity of managing the Employee Relations Unit, I had direct, “first person” and detailed knowledge of the Ministry’s behaviour in respect of the various matters which ultimately led to my termination and which caused me to bring the civil action.

18The above is a sufficient basis on which to issue the declaration requested by the employer that the grievor has breached the Minutes of Settlement. However, in deference to some of the other arguments made, I will address a number of them. Although not determinative, given the broad wording of the recitals in the Minutes of Settlement, it is important to underline that there is no lack of privity of contract or consideration before me, as the party seeking a remedy for the breach is the employer in its own right, not as a representative for the defendants to the lawsuit. The employer argues on its own behalf that it bought and paid for a full settlement of all issues related to the grievor’s employment. The terms of paragraphs 3 and 12 read together make it clear that the monetary consideration given was to extinguish all possible entitlement flowing from Mr. Antoncic’s employment. Further, as noted by Madam Justice Swinton in Disher v. Kowal , cited above, although in the context of a claim of a breach of the rule as to implied undertakings, the effects of lawsuits against employees who provide information to employers are not limited to the specific outcome for those individuals in Court. Other results for the employer include a potential chilling effect among employees flowing from the use of such information as a basis to sue, leading to difficulty in conducting effective workplace investigations, as well as disruption to the employer’s operations flowing from the inevitable involvement of employees in the lawsuit, as many aspects of the grievor’s employment would be re-examined. In the matter before me and the employment context of this Ministry, it is clear that these effects are of serious concern.

19Further, I note that the Morgan decision, cited above, relied on by grievor’s counsel concerning the release clause, is distinguishable, in that the decision does not indicate a context of such broad language concerning what was settled as appears in the Minutes of Settlement in issue before me. Nor did it include a sentence such as the second sentence of paragraph 12 of the Minutes of Settlement to the effect that the monetary payment accepted by the grievor was in lieu of any head of damages under statute or common law. The release language in the Minutes of Settlement before me is an integral part of the document; it is not a separate document, and this second sentence of paragraph 12 is not restricted to damages claimed against the Crown or the Ministry specifically. In this respect, the ordinary, clear meaning of the words “in addition” is something more than what went before, i.e. the specific release of the employer and the Crown. As well, a reading of the Minutes of Settlement in Morgan lead the trial judge to assume that the plaintiff had been wrongfully dismissed, an interpretation not available on the wording of the settlement signed by Mr. Antoncic, given its explicit expression of being without prejudice and including no admission of liability on either side.

20In regards to the specific paragraphs of the Minutes of Settlement alleged to be breached, I find that the evidence supports the employer’s allegations, with the exception of the allegation of a breach of paragraph 10, relating to the return of the materials disclosed to counsel. I agree with grievor’s counsel that the evidence does not establish that no instruction was given, or that the materials were not returned as detailed therein. Nonetheless, there remains a question which the parties agreed to defer until the remedial phase of this matter, if necessary, as to the manner in which the grievor obtained access to notes of the workplace investigator and whether his retention and use of such information should attract a specific remedy.

21Concerning paragraph 7, agreed by its terms to be a “vital term and condition” of the settlement, the evidence supports a finding that it was breached by the launching of the civil suit. Grievor’s counsel argued that the information necessary to the lawsuit should not be considered to be obtained during the course of his employment, as defamation was not part of his job. I am unpersuaded by this argument, when it is clear that the facts of which Mr. Antoncic complains came to him as a result of his job as staff relations manager, including his participation in the procedures flowing from the complaint lodged against him by the released employee. In his own letter of October 27, 2008, the grievor acknowledges that he obtained the information leading to the lawsuit “in the capacity of managing the Employee Relations Unit”. In this regard, I do not find the situation analogous to the facts in Consolidated Mining, cited above, relied on by grievor’s counsel, where two workmen were found not to be in the course of their employment when they caused damage by letting a cooking fire escape, when they had not been employed to set cooking fires. More generally, whether or not the allegations against him were true or false, (and therefore capable at law of being considered defamatory), or sufficient to justify the grievor’s discharge, were issues that would have been at the heart of the litigation of the grievance, which both parties chose to avoid by executing the Minutes of Settlement.

22The other argument relating to paragraph 7 advanced on behalf of the grievor was that its wording was overbroad, and should not be interpreted to mean every piece of information that was obtained during a time period coincident with his former employment. There may be matters, for example information exchanged among employees unrelated to Ministry business, which ought not to be included in the scope of the information the grievor is required to keep confidential by the Minutes of Settlement. However, it would be a serious undermining of the parties’ agreement to say that paragraph 7 does not include information such as the central facts at issue in the grievance itself, many of which are pleaded in the Statement of Claim. In this regard, perhaps it bears specifying that the information concerning possible conflicts of interest or personal animus for an action within the grievor’s job such as releasing a probationary employee are very much related to the course of his employment and thus included in what is covered by paragraph 7.

23As to paragraph 9, the mutual non-disparagement portion of the settlement, grievor’s counsel submits that the portion of the statement of claim which states that the grievor was wrongfully dismissed cannot be considered disparagement, as it is just a legal conclusion. Counsel submits that because Mr. Antoncic was dismissed without notice, and there is no acknowledgment of any wrongdoing on either party’s part, he is free to continue to maintain that he was dismissed without cause. Further, relying on Razzell v. Edmonton Mint Ltd. 1981 CanLII 1198 (AB QB), [1981] 4 W.W.R. 5, counsel argues that there is absolute privilege for statements made in pleadings, such that the statements should not be considered disparaging, which counsel asserts means defamatory. In Razzell, the court found that a statement of claim alleging publication of defamatory material in another statement of claim, as well as in an examination for discovery, disclosed no cause of action as the context of the publication constituted an occasion of absolute privilege. Employer counsel replied to this argument, emphasizing the mutual promises of non-disparagement, as well as the statements in Mr. Antoncic’s letters to the Minister and the Attorney-General making it clear that he intended to criticize and embarrass the employer in the information he would elicit in the lawsuit.

24In my view, the ordinary meaning of the word disparagement does not require that a statement meet the legal test for defamation. Further, the Ministry is not claiming that the statements made in the Statement of Claim constitute the actionable tort of defamation. Rather it is claimed that the allegations in the Statement of Claim, for instance, paragraph 14’s statement that the Ministry relied on an erroneous investigation report in order to wrongfully terminate Mr. Antoncic, are disparaging in the sense of critical or disapproving, and thus breaches paragraph 12 of the Minutes of Settlement. In these circumstances, I do not see this as a situation to which the discussion of privilege in the context of suits for defamation discussed in Razzell applies. Moreover, and more germane to this decision, the decision in Razzell does not stand for the proposition that, having agreed by contract, for consideration, not to disparage the employer, Mr. Antoncic may do so with impunity, so long as he does so in statements of claim. Further, I find the statement in paragraph 14 to be disparaging of the employer in the ordinary, rather than tortious, sense of the word. Moreover, I am not persuaded that the language, to which Mr. Antoncic voluntarily agreed, is so broad as to constitute an improper limit on his freedom of speech.

25As to paragraph 12, I also find it to have been breached in that the statement of claim is incompatible with the second sentence which, as noted above, acknowledges that the consideration provided is exhaustive of all possible entitlements, including common law damages. In this regard, I note that the Cass text relied on by the grievor, supports the interpretation of the document as a whole, in light of the purpose recited therein. In this respect, the second sentence, about which more has been said above, reflects the recital that the specific terms represent “full and final resolution of all claims and matters regarding the Grievor’s past employment.”. In this context, it is not necessary to have any particular release language to make the lawsuit against the employees a breach of the settlement with the employer.

26To summarize, for the reasons set out above, the employer’s request for a declaration that the grievor has breached the Minutes of Settlement is hereby granted. I remain seized to deal with the remedial aspects of the matter if the parties are unable to resolve them on their own. Either party may request dates of the Registrar to reconvene the matter when so advised.