It has long been a routine part of the settlement of a matter or
the severance of an employee to exchange mutual release agreements.
These releases typically provide that both parties to a dispute
agree to give up all legal claims, whether or not these claims are
known at the time of signing, that they may have against each
other.
From an employer perspective, obtaining a release from a
departing employee allows you to close your file and know that
should the employee come back later with a further claim, you have
a shield. However, giving such a release to a departing employee
also significantly limits an employer's recourses when issues
are discovered postdeparture.
While the release might be upheld in some circumstances, recent
case law, stemming from the Ontario Court of Appeal, York
University v Markicevic, 2018 ONCA 893, indicates that a mutual
release agreement can be set aside when a party makes a fraudulent
misrepresentation, ultimately inducing the other
