Employers, Time to Rethink Your Releases!

In the recent decision of Watson v. The Governing Council of the Salvation Army of Canada, 2018 ONSC 1066, the Ontario Superior Court had the opportunity to consider the enforceability of a standard employment release in relation to allegations of sexual harassment.

The facts of the case are simple, however its implications are significant. Emma Watson was briefly employed as the manager of a Salvation Army thrift store. Following her termination, she executed a standard form employment release. The release stated, in part, that:

… 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; …

Subsequent to signing the release, Ms. Watson brought a claim against both her manager and the Salvation Army, alleging that she had been sexually harassed during her employment. Her manager sought to have her claim dismissed on a summary judgment motion, on the basis that she had executed a full and final release.

The Superior Court considered the language in the release and found that the scope of the release was the employment relationship. "While many of the alleged events occurred at the place of employment and, perhaps, because of the employment, sexual harassment, intimidation and other improper conduct are not connected to employment. They are clearly separate matters." Her claim was therefore not barred by the release.

As a result of this decision, it would be prudent for employers to review their standard releases provided to employees upon dismissal to ensure that they are drafted broadly enough to cover claims such as harassment and sexual harassment. It would be recommended to add language expressly releasing any such claims, regardless of whether such a claim is contemplated at the time a specific employee is terminated.