Can you enforce an employment release when allegations of sexual harassment arise?

A recent decision in the case of Watson v. The Governing Council of the Salvation Army of Canada, 2018 ONSC 1066 (CanLII), has resulted in noteworthy implications for employers.

The Ontario Superior Court ruled that the Full and Final release signed by the employee, Ms. Watson, at the time her employment relationship was terminated with the Salvation Army, did not prevent her from bringing a claim for damages on account of sexual harassment by her former manager.

Despite the fact that the release contained the appropriate language to release the employer from all claims connected to her employment, the Court ruled against the employer’s motion for summary judgement on account of the executed release. The Court concluded that sexual harassment did not arise from the employment relationship and therefore could not be covered by the release:

“ … the Release cannot be considered all inclusive, including the claims herein, as the scope was the employment relationship. While many of the alleged events occurred at the place of employment and, perhaps, because of the employment, sexual harassment, intimidation and other improper conduct are not connected to employment. They are clearly separate matters.”

It would be prudent for employers to consider the language contained within their standard release to prevent similar issues from arising. For example, drafting the release broadly enough to cover harassment claims and accounting for the possibility that not all claims are contemplated at the time the release is executed.