Caponero v Alberta Human Rights Commission and Kaizen Auto Group, 2024 ABKB 2 was an unsuccessful appeal of a complainant from a decision of the Alberta Human Rights Commission which had denied his complaint. The AHRC had found that a settlement release the complainant had signed was enforceable to prevent him from continuing his human rights complaint. The ABKB agreed and this judicial review was dismissed.
This case is important because it involves the enforceability of a settlement and release, which can have a major impact on the rights of employees, employers, and other civil litigants.
Facts
The following were the facts summarized by the ABKB:
- The complainant was a long service employee of Kaizen Auto Group
- The complainant had an ischemic stroke, and had filed a human rights complaint while still employed
- The complainant was still suffering from symptoms from that when his employment was terminated
- The complainant was provided the release and other termination documents at the time of his termination of employment
- The termination letter indicated that he was being paid his statutory termination pay under the ESC and was being offered 8 additional weeks in exchange for a release
- The employer told him he could take it away and think about it and that he did not have to sign it in the room with them. However, the complainant employee decided to sign it in the room
- The complainant tried to continue with his human rights complaint, and argued that the release was not enforceable to prevent his complaint
- The AHRC found the release to be enforceable and dismissed the complaint
- The complainant filed a judicial review application, arguing that the dismissal was unreasonable for various reasons.
Analysis / Conclusion
The complainant was arguing at the judicial review that the release was unenforceable because it:
- Violated the Employment Standards Code (ESC);
- Was ambiguous;
- Was unconscionable.
The ESC argument arose out of the fact that the calculation of the “consideration” (the amount the employee is paid) listed in the release included the statutory termination pay. The complainant argued this should void the release. The ABKB disagreed, noting that the overall amount paid was more than the ESC minimum, and the termination letter indicated that the ESC amount would be paid whether the complainant signed the release or not. The ABKB upheld the AHRC’s decision on this point as reasonable.
On the ambiguous argument, the Court found that the release and the rest of the termination documents had to be read together as part of the surrounding circumstances in interpreting the release, and when that was done the package was not ambiguous. The ABKB upheld the AHRC’s decision on this point as reasonable.
On the unconscionability argument, the ABKB upheld the AHRC’s decision that it was no unconscionable as reasonable.
The Court found that the release was not unconscionable because: (1) there was not a sufficient inequality in bargaining power. The complainant was capable of adequately protecting his interests, and (2) it was not shown to be an improvident bargain.
Regarding the finding that there was not a sufficient inequality in bargaining power, the Court summarized part of the AHRC’s findings as follows:
[9] Mr. Caponero argued that he was in a weakened and vulnerable state when he signed the release due to ongoing symptoms from his ischemic stroke, including confusion, poor decision making and poor judgment and memory issues. The Tribunal reviewed the testimony of Mr. Caponero and Ms. Caponero and looked at Mr. Caponero’s return to work efforts. The Tribunal engaged in a detailed review of Mr. Caponero’s medical records and the evidence of Dr. Surani and Dr. Clark and at paragraphs 52-53 of the decision concluded:
On the basis of all of the evidence, I cannot find that, on August 31, 2020, the complainant was experiencing such significant and serious cognitive impairments that would undermine the validity of the Release. I accept the evidence of Drs. Surani and Clark that the complainant would not have been “100%” or at his pre-stroke condition on August 31, 2020. I also accept the complainant’s evidence that he was still experiencing stroke-related impairments throughout 2020, and to the present.
However, that is not enough to find that the complainant’s impairments were so serious, and of a nature to undermine a sufficient level of comprehension and volition.
The Court went on to find that the AHRC’s decision that the complainant could adequately protect his interests was a reasonable one. The Court noted as follows:
[40] […] Not every impairment or disability will necessarily give rise to a successful claim of unconscionability. The impairment or disability must be of sufficient gravity that it renders a party incapable of adequately protecting his or her interests.
[…]
[42] The Tribunal went through Mr. Caponero’s medical records in detail and heard evidence from him and his wife as well as from Mr. Caponero’s treating physician and from the psychologist who prepared a neuro-psychological report regarding Mr. Caponero’s condition. After hearing and weighing all the evidence, the Tribunal concluded that Mr. Caponero had not established he was incapable of adequately protecting his own interests when the offer of severance was presented to him. As the basis for that finding is well documented and supported by the evidence, it is not unreasonable.
My Take
This would have been a challenging judicial review to launch, but I am not surprised the complainant went forward with it.
First, the severance the employee ultimately received is likely quite a bit below what the employee would have been entitled to as reasonable notice for termination without cause, had he not signed the release. This realization after already signing the paperwork would upset most people.
Second, some of the AHRC’s findings respecting the ability of the complainant to protect his interests (for unconscionability analysis) do not seem reasonable, to me at least. A primary aspect of whether someone can protect their interests in an unconscionability analysis is their level of vulnerability. This is a long-service employee who had a stroke and had his employment terminated when he was still having symptoms, and then signed a release in the room. There are more vulnerable folks out there, sure, but this is a highly vulnerable person at the time he signed the release. I am a bit surprised the ABKB upheld this aspect of the AHRC’s reasoning. I also think the complainant’s argument that the bargain was improvident had some merit, but I could see an adjudicator deciding that point either way so I am not surprised by the AHRC decision on that point or that of the ABKB.
I am also not entirely surprised by the overall result on judicial review. Success on judicial review is very challenging. In this case it required not that the decision was incorrect, but that it was not even reasonable. Unconscionability requires both (1) bargaining power imbalance, and (2) improvident bargain. Even if there was a finding of a bargaining power imbalance, it still a big challenge to prove that a bargain is sufficiently improvident for it to be considered unconscionable.
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