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Prohibitions on Non-Disclosure Agreements in Ontario

Justin Villeneuve • Nov 26, 2022

Prohibitions on Non-Disclosure Agreements in Ontario


The provinces of Nova Scotia, Manitoba, and most recently Ontario have proposed provincial legislation to regulate the use of non-disclosure agreements ("NDAs"). Like Nova Scotia and Manitoba's legalization of NDAs in regards to sexual harassment and discrimination similar to what is now law in PEI, Ontario's initiative only deals with sexual abuse towards those enrolled postsecondary education.


Ontario’s Unique Position in Regulating NDAs

On October 27, 2022, Ontario’s Minister of Colleges and Universities Jill Dunlop introduced a new plan that would mean changes for higher education in the province. The key points of the minister’s proposal include: Bill 26, Strengthening Post-secondary Institutions and Students Act, 2022. Bill 26 was read for a second time and has been referred to the Standing Committee on Social Policy. 


If it is passed, Bill 26 will change current legislation to demand that post-secondary institutions make policies to handle sexual abuse perpetrated by faculty and staff against students. The new plan would stop the use of NDAs in particular contexts.


Bill 26 creates a minimum definition of sexual abuse based on the Criminal Code and Human Rights Code. The proposed legislation also allows post-secondary institutions to define additional conduct that falls under sexual abuse in their policies.


Bill 26 would allow institutions to fire or discipline employees who have committed “sexual abuse”, as defined in the bill, against students and creates a prohibition against these employees being re-hired even when doing so goes against existing employment contracts. The bill also reinforces former Premier of Ontario Kathleen Wynne’s “Action Plan to Stop Sexual Violence and Harassment” by requiring post-secondary institutions to develop their own sexual misconduct policy according to the guidelines set out in the plan.


If Bill 26 passes, it would outlaw any clauses in agreements - including settlements - made between post-secondary institutions and employees who were found guilty of sexual abuse against students. These agreements often include gag orders preventing the institution from disclosing the employee's misconduct. However, this bill only applies to findings of sexual abuse that come from an official source, such as a court or arbitrator.


It is important to note that "adjudicator" is not defined in Bill 26 or any other previous legislation. Consequently, it unclear whether the term would refer to internal or external investigators that are often brought in by colleges and universities to look into complaints of sexual abuse and harassment. This ambiguity becomes an issue when settlements resulting from these investigations take place before any involvement from courts or arbitrators.


Bill 26 gives post-secondary institutions wide latitude in how they operate. They can define "sexual abuse" however they want in their policies and decide for themselves who qualifies as an "adjudicator." That would mean that schools could settle claims of sexual misconduct without any input from law enforcement or the justice system.


Bill 26 does not take into account the wishes of the student survivor of sexual abuse, which could result in survivors wanting an NDA but being unable to have one because of the Bill. Additionally, The Bill's ban on NDAs only prevents the disclosure that an employee committed an act sexual abuse against a student and nothing more.A survivor's account of their experience, the impacts this has had on them, and any terms of settlement (e.g. how much they are paid) could still be limited by various factors.


If granted royal assent, these amendments would come into effect on July 1st, 2023. However, the proposed amendments would not apply to agreements and settlements before the legislation's coming-into-force date. That said, the Bill would override any existing collective agreements.


If we want justice for survivors of sexual violence, then we need to consider how NDAs might impact them. Making it harder to use NDAs makes it more likely that perpetrators and the people who enable them will be held accountable. It also gives survivors the power to share their stories if they want to. But if we make it against the law to ever use an NDA in any situation, that could make it less likely that cases get settled early. That would cause more traumatizing legal battles that take forever, are expensive, and hurt vulnerable survivors even more than they already have been.


By allowing survivors to make an informed decision on whether or not to sign an NDA, we are protecting them and enhancing their access to justice. This choice may also help with their healing process by providing closure. Although Ontario's legislation is going in the right direction, it needs to be amended as it only applies to the employment setting instead of broader survivor needs.


There is no indication of whether or not Bill 26 will be changed to put survivors first, or if the province is okay with letting post-secondary institutions create their own policies about NDAs and sexual misconduct. Furthermore, it's unclear if other sectors in Ontario will see similar bans on NDAs soon. For example, elementary and high school students who have been abused by teachers would gain nothing from this proposed legislation as it stands—which illustrates how limited Bill 26 currently is.


NDA legislation has not been proposed at the federal level yet, but Senator Marilou McPhedran plans to introduce a bill soon that would ban NDAs for certain organizations governed by federal law.


More information on how to do this can be found on the Ontario Legislature’s website.


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You can schedule a call with one of our lawyers anytime. Call today and get the help you need.

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Or fill out our online form, and we will respond within 24 hrs.

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