Confidentiality Clauses: the Jan Wong Case - LawNow Magazine

Confidentiality Clauses: the Jan Wong Case

Famous Case Revisited

. . .  I can’t disclose the amount of money I received

I’d just been paid a pile of money to go away . . .

Two weeks later a big fat check landed in my account.

Even with a vastly swollen bank account . . .

Introduction

Almost all lawsuits are settled or abandoned. Only about 5% go through to a full trial. Nearly all settlements where lawyers are involved have a confidentiality clause in the settlement agreement. If there is a payout of money, generally no one can talk about it. Most of the time, the parties all agree to these clauses in order to get the cash and end the legal hostilities.

This column describes a recent case that demonstrates the seriousness of these confidentiality clauses.

Provocation of Journalist Jan Wong

The arbitrator ordered Wong to pay back the entire $209,912 she had received in the settlement.In September 2006, Jan Wong’s employer, the Globe and Mail, instructed her to write an article on the assassination of a student at Dawson College in Montreal. In her article, “Get Under the Desk”, Wong expressed a view that the shooting, along with two previous school shootings in Quebec, could be linked to the alienation of non-native Quebecois in the province. After publication, public outcry challenged the suggestion that Quebec society was obsessed with “racial purity”.

Wong became the target of hate mail, racial comments and even death threats. Many politicians and Quebec journalists denounced the article and demanded an apology. Wong refused to retract her view, and the Globe and Mail defended her on the basis of free speech. The Globe and Mail took the position that a journalist’s job is to ask hard questions and explore different ideas, even those which are controversial. Neither Wong nor the Globe and Mail apologized for the article.

Depression and Settlement

The personal attacks against Wong were relentless. Her mental health deteriorated, and she developed severe depression. She took sick leave from work between October 2006 and the spring of 2007. In April 2007, Wong went back to work but relapsed, and she took more time off work.

After refusing to pay sick leave between June and November of 2007, the Globe and Mail ordered Wong back to work in May 2008. They did not believe she was still sick or unable to work. Wong said she was still medically unfit to return to work. When she did not return, the Globe and Mail terminated her employment.

The court found the settlement agreement’s confidentiality clause was clear and unambiguous.Wong’s union grieved the unpaid sick leave and wrongful dismissal. After a few months of arbitration, the union and the Globe and Mail reached a settlement. The Globe and Mail agreed to pay Wong for the unpaid sick leave between June and November 2007 along with two years of salary for a total settlement of $209,912.

During the arbitration, Wong expressed her desire to write a book about her experience. The Globe and Mail demanded Wong keep the agreement confidential and not speak negatively about the Globe and Mail, in exchange for the payment.

In the settlement agreement, both parties agreed not to disclose the terms of the settlement and not to speak negatively of the other party for a period of approximately one year. If Wong breached the agreement, the agreement said the arbitrator could make a decision and could require Wong to return the $209,912.

“Out of the Blue” Trouble

Beginning in October 2010, publisher Doubleday advertised Wong’s new book, titled “Out of the Blue”. Wong commented on the Globe and Mail’s reasons for firing her in an article in Chatelaine magazine. The Globe and Mail contacted Doubleday to voice its concern about these comments. Doubleday chose to not publish the book after pressure from the Globe and Mail, but Wong went ahead and self-published the book in May 2012.

After the book’s publication, the Globe and Mail argued to the arbitrator that 23 phrases in Wong’s book violated the confidentiality provision in the settlement agreement. The arbitrator agreed that at least four phrases in the book (set out at the top of this article) were in breach of the agreement because they disclosed that the Globe and Mail had paid Wong to settle the case. The arbitrator ordered Wong to pay back the entire $209,912 she had received in the settlement.

In 2014, Wong appealed the arbitrator’s decision. Wong had thought she could still speak about the terms of the settlement as long as she did not reveal the exact amount paid. She further argued that, if she did breach the terms of settlement, the arbitrator should not have forced her to repay the full settlement amount as that constituted an oppressively punitive forfeiture provision. She argued that the arbitrator should not enforce the penalty because it was disproportionate to the harm caused and was penal in nature.

Decision on Appeal

All three judges dismissed Wong’s appeal and ordered her to pay costs of $15,000 to each of her former employer and the union. The court found the settlement agreement’s confidentiality clause was clear and unambiguous. It stated that the parties could not disclose the “terms of the settlement”, and Wong had disclosed a large lump sum payment had been made to her.

… both parties agreed not to disclose the terms of the settlement and not to speak negatively of the other party for a period of approximately one year.While the harm suffered by the Globe and Mail was intangible and hard to quantify, the court concluded the return of the settlement money was not excessive or punitive. Wong was not required to pay back what she received for unpaid sick leave. The repayment provision was not unconscionable. The union represented Wong during settlement negotiations with the Globe and Mail so there was equal bargaining power.

Moreover, Wong did not have standing to appeal the arbitrator’s decision because the settlement was between the union (on behalf of Wong) and the Globe and Mail, not Wong and the Globe and Mail.

Where Is Jan Wong Now?

Wong’s latest book, Apron Strings: Navigating Food and Family in France, Italy, and China, came out in 2017. It appears she currently lives in Fredericton, New Brunswick and is a professor in journalism at St. Thomas University. She writes for the Halifax Chronicle Herald and Toronto Life magazine, speaks on a variety of topics and issues, and promotes her latest book at readings and book signings across Canada.

Authors:

Peter Bowal
Peter Bowal
Peter Bowal is a Professor of Law at the Haskayne School of Business, University of Calgary in Calgary, Alberta.
 

Andrew Broschinski
Andrew Broschinski is a student at the Haskayne School of Business, University of Calgary.
 


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