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Breaching Confidentiality Clauses – Police Officer Must Return Settlement Award

Further to a recent blog by Michael MacLellan, the following case provides yet another important example of abiding by the terms of a negotiated settlement.

Philip McRae, a constable with the Barrie Police force, was awarded a confidential settlement including 28 months of a back pay pursuant to a collective agreement. The award, granted by Arbitrator Marcotte on May 11, 2011 through a memorandum of agreement, was negotiated between the Barrie Police Services Board (the “Board”) and the Barrie Police Association (the “Association”, on behalf of Constable McCrae). The grievor preferred to proceed to a hearing and, in fact, never signed the eventual agreement. In addition to the monetary compensation, the award stipulated that the settlement was strictly confidential and Arbitrator Marcotte was to remain seized.

In October of 2011, the grievor posted a letter to an employee bulletin board outlining the terms of the monetary award and his displeasure with the Association’s decision to accept the agreement. At this point in time the grievor was vying for the position of Association President.

The Board sought direction from Arbitrator Marcotte alleging a breach of the Memorandum of Agreement. Specifically, the Board argued that the monetary award should be quashed in light of the breach of the agreement’s strict confidentiality clause. Marcotte agreed with the Board and ordered the return of the settlement money. Within the decision Marcotte highlights important principles and lessons to take for both union and employer counsel with respect to settlement agreements.

Among these key principles is the understanding that a bargaining agent has the authority to bind bargaining members. This is essential to the collective bargaining relationship. This is true regardless of the individual’s stance on the subject matter. The individual member may have other recourse when facing a difference in opinion with their union (e.g. challenge the union’s duty of fair representation) but the employer should not suffer as a result. Regardless of whether Const. McRae agreed with the Association’s strategy or the agreement, they represented his interests and bound all parties by signing the Memorandum of Agreement.

A union has carriage of any grievance brought forward and has the power an authority to bring it forward, withdraw, or settle any dispute on behalf of its members. Furthermore, a union member, regardless of whether they signed the agreement, is bound to respect its terms. In essence, actions by individual members, contrary to a memorandum of agreement, may bind the union. Therefore, Const. McRae’s action of releasing the details of the agreement was found to violate the terms.

The return of the award signified the importance of preserving the effectiveness of the grievance settlement process. If parties do not share a mutual confidence that the terms settlement will be honoured then the option of resolution by settlement quickly disappears. This award provides deterrence and reinforces the principle that agreements must be honoured by both sides. However, Arbitrator Marcotte was careful not to imply that a full return of a monetary award is appropriate in all cases. The remedy must be crafted to be commensurate with the circumstances. In this instance the grievor deliberately released the terms of the agreement and had a political motive for doing so. Those actions cannot be condoned and the full award was ordered to be returned to the Board.

The importance of having a well drafted confidentiality clause is clear by the outcome of this case and another recent case found on The Employers’ Edge blog, The Value of a Well-Crafted Settlement Document. The lawyers at CCP are able to assist employers with drafting settlement agreements and providing guidance when faced with a breach of agreed terms.

Please Note: This blog has been prepared as an informational service for our clients and other interested parties. It is not intended to constitute legal advice, a complete statement of the law or opinion on any subject. Although we endeavour to ensure the accuracy of the content, no one should act upon the information provided without a thorough examination of the law after the facts of a specific situation are fully considered.



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