What results if a just-dismissed employee is essentially forced to sign a release, preventing him from taking legal action? 

Does it matter if the employer took advantage of the employee’s personal problems, effectively "preying" on his concerns, and even threatening him by stating he would get nothing unless he signed his name?

According to a recent Ontario Judge, not much!

After 15 years of service with Pennzoil-Quaker State, Patrick Barr was fired and found himself in a pickle. Presented with an offer of severance, Barr was given two weeks to decide his fate – sign his name on the documents, thus accepting the company’s offer, or receive nothing more.

According to Barr, he was told by the HR director several times that the offer was a "very good deal" and that he did not need to consult a lawyer. The problem was that the HR manager who urged him was his long-time trusted friend, who spoke to Barr in a personal capacity. The manager even showed up at his house and effectively, advised him to sign off on the deal.

Barr also claimed that the company, knowing that he had recently been through costly divorce proceedings, "preyed" on his concerns of mounting legal costs by threatening that , if he didn’t agree to it’s initial offer, he would ultimately get less.

Relying on his friend’s advice and presumably fearful of challenging his ex-employer, Barr signed the documents and was paid according to the terms of the offer. Later on, believing the deal was unfair, Barr sued Pennzoil, claiming the agreement was substantially one-sided and should be set aside, as it was signed under duress.

An Ontario court recently disagreed with Barr, dismissing his claim and indicating that there was no genuine issue for trial. The court indicated that Barr could have refused his friend’s advice and discussed the deal with a lawyer. The deal was less than what Barr could have received and was "unfortunate" according to the court.

This case provides a stark message for employees when confronted with an offer of severance or an ironclad release: fair or not, seldom will a signed document be set aside.

Employees can avoid this result by observing the following advice:

  • Like any commodity, a termination package is usually negotiable. Seek specialized counsel before signing your name.
  • Duress or coercion is not easily proven – especially where the employee is given time to consider the offer and does not immediately protest his or her consent.
  • Ask for more time or the opportunity to meet with a lawyer if the terms of an offer or release are unclear.

You can read the article in full here.

Daniel A. Lublin is a Toronto Employment Lawyer specializing in the law of wrongful dismissal.  He can be reached at dan@toronto-employmentlawyer.com or visit www.toronto-employmentlawyer.com