Compliance order against past employer who breached confidential settlement…

The Employment Court has ordered a past employer to comply with terms of a confidential settlement after its employees made disparaging remarks about the woman who was party to the agreement.

The woman contracted with an employer in an engineering role. After several months hostilities arose between herself and other employees. After mediation failed, an employment advocate helped her negotiate an exit settlement in which one of the clauses stated neither party would disparage the other to any third parties.

Subsequently, the woman took up work with another engineering firm. This firm contracted with the woman’s previous employer. Despite this, she worked on the project for several months in a satisfactory manner.

When the past employer moved staff onto the project that there had been earlier hostility with they asked the firm remove the woman from the project.

In requesting reasons why, the past employer’s employees revealed to the firm there had been employment issues, and repeatedly stated they could not say any more. It was conceded that the ways in which these statements were made carried negative connotations. Upon removing the woman from the project, the firm said to her, “You must have done something really bad for them to request this”.

The Employment Court construed the conduct of the past employer’s employees to have the effect of disparaging the woman, resulting in her removal from the project. This resulted in her having to seek employment elsewhere and moving away from family.

The Employment Court ordered the past employer to comply with the terms of the settlement through a compliance order, effective immediately. Costs were also awarded against them.

As an employer, it is important to ensure all parties adhere to confidential settlements, otherwise you run the risk of protracted litigation, damages and cost awards.




Alan Knowsley
Employment Lawyer
Wellington