In Buterman v. St. Albert Roman Catholic Separate School District No. 734, 2017 ABCA 196, the Alberta Court of Appeal confirmed that the province’s human rights tribunal lacked jurisdiction to hear a human rights complaint due to the existence of a settlement agreement.
Jan Buterman was removed from the roster of substitute teachers maintained by the Board of Trustees of the Greater St. Albert Roman Catholic Separate School Board District No. 734 (the “Board”) because he was in the process of transitioning from female to male. Mr. Buterman filed a complaint with the Alberta Human Rights Commission against the Board alleging discrimination on the basis of gender and mental and physical disability (namely, gender identity disorder) contrary to the Alberta Human Rights Act.
In October 2009, the Board offered to settle the complaint for $78,000, in exchange for (1) a withdrawal of the complaint, (2) a covenant not to advance any further human rights complaints or legal process in relation to the complaint, and (3) a standard release containing a confidentiality clause (the “2009 Offer”). Mr. Buterman initially rejected that offer. However, in September 2010, Mr. Buterman (through his lawyer) indicated he was willing to accept the 2009 Offer. He requested that the Board confirm whether that offer remained open for acceptance, after which the parties could “discuss the details of the settlement.” The Board promptly advised that the 2009 Offer remained on the table and confirmed Mr. Buterman’s acceptance.
Later, following an exchange of correspondence over the wording of the release and confidentiality agreement, Mr. Buterman (through his lawyer) returned unsigned the draft settlement documents and the settlement money. Mr. Buterman subsequently made a statement to the media that he had rejected the Board’s settlement offer because of the confidentiality clause contained in the release.
Alberta Human Rights Tribunal (“Tribunal”) Decisions
The Board applied to the Alberta Human Rights Tribunal (the “Tribunal”) seeking a preliminary determination that the Tribunal had no jurisdiction to hear the complaint as a result of the settlement agreement. The Tribunal determined that the parties had entered into an executory contract of settlement (i.e., one not yet fully completed). It held that the parties had settled on September 8, 2010 and that they did not, through their subsequent correspondence, repudiate the agreement; they were merely working out the wording of the documents. The Tribunal added that it was up to the parties to “take the steps that will determine the way forward, whether that is to execute the settlement or otherwise”.
Following this decision, the Board sent Mr. Buterman a cheque for $78,000 and draft settlement documents. The Tribunal then issued a second decision in which it found it no longer had jurisdiction over the complaint because the settlement agreement had been fully executed (i.e., completed) and, as a result, Mr. Buterman had relinquished his complaint.
Alberta Court of Appeal (“Court”) Decision
Following an unsuccessful appeal to the Court of Queen’s Bench, Mr. Buterman appealed to the Alberta Court of Appeal. The Court upheld the Tribunal’s finding that the parties had reached a settlement agreement on September 8, 2010. It rejected Mr. Buterman’s argument that the agreement was invalid because there was uncertainty as to its “essential terms”. The Court upheld the Tribunal’s finding that the execution of the release and confidentiality agreement was an essential term, but the form of the document was not.
The Court also rejected Mr. Buterman’s submission that the Board had repudiated the settlement agreement in its post-agreement correspondence. It noted that the Tribunal had found the Board was receptive to amendments and that the parties were engaged in an exchange about the final wording of the documents. The Court added that in order for an agreement to be repudiated, the non-repudiating party must communicate acceptance of that repudiation. Here, although Mr. Buterman had communicated with the media, at no time did he communicate his acceptance of any alleged repudiation to the Board. In the result, the Court confirmed that, due to the settlement agreement, the Tribunal had no jurisdiction to hear the complaint.
A key takeaway from Buterman is that the formation of a settlement agreement must be distinguished from the completion of that agreement. Although the parties had not worked out the precise language to be included in the settlement documents at the time the employer had confirmed the acceptance of the earlier offer it had made, that did not preclude a finding that a settlement agreement had been formed at that moment. The “essential terms” of the agreement had been settled, and the parties’ subsequent communications over what the Tribunal took to be relatively inconsequential matters of wording did not change that fact. Accordingly, the mere fact that the parties continue to negotiate the terms of a bargain does not necessarily mean a legally binding agreement has not already been reached.
Despite the result in Buterman, employers must recognize that any attempt to settle a complaint or claim brought by an employee – or anyone else, for that matter – must be approached carefully. It is critical to ensure the “essential terms” of the agreement are nailed down; otherwise, the counterparty may attack the agreement on the basis that its terms are too uncertain to constitute a binding contract. Furthermore, post-agreement negotiations over the terms of the settlement – or “tinkering” with the agreement – may invite an argument that new terms have been added to the contract that were never the subject of agreement.
If you have any questions about settlement agreements or related issues affecting your business, do not hesitate to contact one of the members of our Labour and Employment group.
*This blog was written with the assistance of Connor Bildfell, Articling Student.