The government had previously stated that confidentiality clauses that did not follow the proposed amendments were not valid. However, this specific wording was not used in its last response to the consultations. We will not be clear until the government publishes the bill. There is no clear timeline for the implementation date of the proposed amendments. In the meantime, lawyers who design confidentiality clauses should comply with the SRA`s warning (warning – use of confidentiality agreements) Since proving damages due to a breach of confidentiality tends to be difficult, settlement agreements may define remedies, including lump sum financial damages, rights of omission, attorneys` fees and/or fees. One. As an employer, you can do this, but you must ensure that the confidentiality clause is clear as to what is covered and the rights of the worker. The court decided that the arbitrator conducted the correct analysis by checking whether the clause was a penalty clause or a forfeiture clause. Although the arbitrator does not refer directly to the prominent decision in Peachtree II Associates – Dallas, L.P. v.
857486 Ontario Ltd. (2005), 76 O.R. (3d) 362 (C.A.), it considered the applicable analysis. These include a distinction between a punitive provision that involves a payment of money “fixed as in the terrorism of the injuring party” and a forfeiture provision that involves the loss of something, often money, that is considered a guarantee for the performance of an obligation. Forfeiture often has criminal consequences, as the lost right or property has no connection with the loss suffered by the innocent party. Peachtree cautions, however, that courts should avoid characterising a penalty clause. In considering this objective, the Court concluded that the clause in the settlement agreement, which requires reimbursement in the event of a breach of the confidentiality provision, was an termination provision and not a sanction. While a penalty clause would require proof of damages, the clause in the agreement was rightly seen as an enforcement mechanism to ensure that the Grievor responds to a component of the business that is essential to The Globe and Mail. Applying the Test on Wong`s circumstances, there was no evidence of unequal bargaining power. She was represented by a lawyer during her complaint and conciliation process and the settlement agreement was the subject of considerable ground-edge negotiations.
Nor is there evidence of a high level of abuse inherent in the repayment provision. Confidentiality was the only thing globe and mail wanted from the transaction agreement, and the reimbursement of the lump sum was the mechanism to be used to enforce the requirement. The court concluded that “this was a completely reasonable enforcement mechanism,” because if Wong did not meet his main commitment under the agreement, The Globe and Mail would be relieved of its primary duty. The employer had paid the amount of the transaction in instalments to the former employee, but it ceased as soon as it discovered that the worker had disclosed information about the amount of the transaction to another former worker. . . .