Employers looking to resolve legal disputes with former employees, particularly in cases where bad faith or human rights breaches are alleged, often find themselves offering up monetary compensation in exchange for a signed settlement agreement confirming that the employee cannot go around disparaging the employer, online or otherwise.
Should the former employee then agree to sign, the employer can rely on that documentation to sue the employee for damages in the event of disparagement.
But what about current employees? What recourse is there for an employer when an employee disparages its business to anyone who will listen? Unsurprisingly, this issue has become more prevalent with the exponential increase in online activity and social media.
It is well known that senior employees, typically but not limited to those at the executive level, owe a fiduciary duty to their employers, which requires them to look out for the best interests of the company. This includes keeping the employer’s best interests in mind when speaking or posting publicly and, relatedly, being mindful that expressing their personal views while holding themselves out as a representative of the company can have repercussions for the business.
Whether the same applies to lower-level employees can be more complex. A recent case involving the Walt Disney movie Snow White, released in theatres on March 21, caused significant controversy due to a number of comments made by the lead actress, Rachel Zegler, who plays the title character.
Zegler’s comments included that she felt the movies’ source material, the original film from 1937, was “weird” and that the original prince was “a guy who literally stalks” Snow White.
Zegler was already under scrutiny for a prior tweet she had posted, which began by thanking her fans for their support, but ended by stating “and always remember, free Palestine.” Additionally, in the lead up to the film’s release, she had made an Instagram post criticizing Donald Trump‘s supporters, causing significant concern among Disney executives.
Many have gone public stating that Zegler’s comments were the cause of the movie tanking in the box office. The cost of production was estimated to be around US$300 million, and the movie only made approximately US$43 million across North America in its opening weekend.
While it’s difficult to establish a direct connection between Zegler’s public statements and the movie’s poor performance at the box office, there are many cases where the nexus between an employee’s conduct and the employer’s loss is far clearer.
To protect themselves, it is best practice for employers to have policies outlining both prohibitions and consequences relating to its employees’ online activity and disparaging comments. These policies should be made clear to the employee prior to commencing their job so that there is no doubt they are aware of their obligations.
While a legal argument can be made that an employee’s obligation not to disparage their employer is an implied term of their employment, an employer will have a much stronger argument — whether defending against a wrongful dismissal action or going after an employee for damages — if they are able to point to a policy that the employee breached.
Both employers and employees should be reminded that, while the rights to freedom of speech and expression are constitutionally protected under the Canadian Charter of Rights and Freedoms, it is a common misconception that this protection applies in all contexts.
In reality, the Charter’s guarantees of fundamental freedoms, including freedom of speech, are designed to shield individuals from unwarranted interference or restriction by governmental bodies and do not extend to private employment relationships or interactions within the private sector.
As such, freedom of speech does not entitle an employee to make unrestrained or inappropriate public comments about their employer, nor does it permit them to voice personal opinions in a manner that may be interpreted as representing their employer or organization, particularly when those views conflict with the values, policies or professional standards upheld by the employer. Employees must understand that expressing controversial, offensive or critical views — especially in public forums such as social media — can have real and serious consequences.
Moreover, invoking the right to freedom of speech will not insulate an employee from disciplinary action or legal repercussions if their conduct violates employment policies, damages the employer’s reputation or breaches contractual or fiduciary obligations.
In such cases, individuals may rightfully be subject to significant consequences, including — but not limited to — the termination of their employment, legal proceedings and financial penalties. It is therefore imperative that employees exercise their rights responsibly and remain mindful of the context and potential implications of their speech, both within the workplace and beyond.
Howard Levitt is senior partner of Levitt LLP, employment and labour lawyers with offices in Ontario, Alberta and British Columbia. He practices employment law in eight provinces and is the author of six books, including the Law of Dismissal in Canada. Jeff Buchan is an associate at Levitt LLP.
Bookmark our website and support our journalism: Don’t miss the business news you need to know — add financialpost.com to your bookmarks and sign up for our newsletters here.
