Breach Of Confidentiality In Settlement Agreement

In the case of Williams v. Alderman Davies Church at Wales Primary School, the EAT considered whether the “last straw” that triggered an employee`s decision to resign and demand unjustifiable dismissal could be harmless even if there was other behaviour that contributed to the employee`s decision to resign, which would amount to a fundamental breach of contract. The employer therefore had no right to suspend the payments, even if the worker had violated the confidentiality clause, as the wording of the confidentiality clause was not sufficient to make that clause a condition of the contract. With regard to employers in particular, the Court confirmed that confidentiality clauses could be strictly enforced in transaction agreements. Mr. Wong argued that the refund provision contained in the agreement constituted a “non-compliance clause” and that the union misrepresented the arbitrator`s provision as a “punitive clause,” leading to a fundamentally erroneous analysis and conclusion. Therefore, if an employer is to successfully withhold an employee`s money for breach of transaction agreements by posting on Facebook via the agreement, it will not succeed unless it has suffered any real embarrassment or expense to sort through the employer`s affairs. For example, a range of staff requests or complaints, work disturbances, a lost contract or negative media coverage. To apply the test to Wong`s circumstances, there was no evidence of unequal bargaining power. She was represented by a lawyer throughout her appeals and transaction proceedings, and the transaction contract was the subject of significant back-and-forth negotiations. Nor is there evidence of a high degree of injustice inherent in the repayment provision.

Confidentiality was the only thing The Globe and Mail wanted in the transaction agreement, and the repayment of the lump sum was the mechanism to enforce the requirement. The Court found that this was a perfectly reasonable enforcement mechanism, because if Wong did not meet their primary obligation under the agreement, The Globe and Le Mail would be exempt from their primary duty. The crucial point was that the confidentiality clause could not be considered a “condition” so that any infringement, no matter how small, would absone its other party from its obligations under the agreement. Instead, it was an “intermediate date” which meant that the effects of an offence would depend on its seriousness. If it were particularly serious, it would amount to a “disgusting” offence which, if “accepted” by the innocent party, would free it from all other obligations of the agreement.