Justice Andrew Sanfilippo of the Ontario Superior Court found that by demanding a release before they would pay her contractual entitlements, Rand repudiated that contract and could no longer rely upon it. When Rand refused to pay those extra two weeks without a release, Perretta sought legal counsel who threatened to sue and pointed out that the employment contract did not require a release.
In addition to requesting a release as a condition of receiving the contracted payment, Rand included items that were never bargained for, such as an indemnity in favour of Rand to hold it harmless from issues arising from her dismissal, a consent to injunctive relief in the event that she were to breach the release, a non-disparagement clause, a confidentiality clause and an agreement that Rand’s payment was without admission of liability.
This case raises another interesting point. When there is a settlement made between parties and the employer provides a release to finalize that settlement that contains these standard terms — and those terms were not negotiated during the settlement process, which they seldom are — this case would provide support for the employee being able to change her mind and walk away from the settlement entirely. It’s a surprising result that counsel and employers must be cognizant of going forward.