Common Ground? Class Action Updates
Alberta Court Permits Disclosure of City’s Workplace Sexual Misconduct Class-Action Settlement, Revealing $9.5 Million Payment to 155 Women
Date: May 21, 2025
The Court of King’s Bench of Alberta has permitted disclosure of settlement details in a class action lawsuit against the City of Leduc, revealing a payment of over $9.5 million to 155 female employees who experienced workplace sexual misconduct. This case represents both one of the highest compensation per person for workplace sexual misconduct claims in Canadian history, and the first settlement of such a class action against a Canadian municipality or fire department.
For employers, the judgment provides critical insights into the limits of confidentiality provisions in class action settlements and establishes important considerations for addressing workplace misconduct allegations.
Background
On February 24, 2022, two firefighters of the City of Leduc (City), Alberta, filed a Statement of Claim bringing a class action against the City for systemic negligence and breaches of section 15 of the Canadian Charter of Rights and Freedoms (Charter). The claim was amended on multiple occasions, including on May 9, 2022, to add employees of the City to the class as well as defamation and section 7 Charter claims.
By April 2023, after various case management meetings, the parties were engaged in settlement discussions. In May 2023, the parties were close to reaching a settlement and requested a hearing date to certify the Claim on consent and to approve the settlement agreement.
On June 20, 2023, the parties reached a signed settlement agreement. In the settlement, the City acknowledged that “some members of the Fire Department and employees of Leduc have suffered gender discrimination, sexual harassment, sexual misconduct, and sexual assault in connection with their employment as firefighters.”
Certification and Approval of the Settlement
Following the July 4, 2023 hearing, the Court of King’s Bench of Alberta certified the proposed class pursuant to s. 5(1) of Alberta’s Class Proceedings Act, SA 2003, c C-16.5 and approved the settlement reached between the parties. The certified class encompassed:
All female current and former employees who worked for Leduc between 2002 and the date of certification who allege that they were subject to discrimination, sexual misconduct, or sexual assault at Leduc.
The Court subsequently approved the settlement, which provided compensation for general damages arising from negligence, defamation, and the section 7 and 15 Charter claims. It established the following structured compensation framework:
- Between $10,000 to $285,000 for women who experienced discrimination, sexual misconduct, or sexual assault while working at the City, based on the level of harm claimed by the claimant (low, medium, or high harm); and
- $10,000 for qualifying defamation claimants.
The City was also instructed to apologize for the conduct that occurred at a City council meeting and to implement policy changes and other restorative measures.
Legal Proceedings Regarding Disclosure
In its 2023 decision, the Court had retained jurisdiction over the implementation, interpretation, and enforcement of the settlement. In March 2024, the plaintiffs applied to disclose the number of women who submitted claims and whose claims were approved. This application was dismissed due to the risk of inadvertently revealing the identity of claimants, due to the limited number of claimants at that point. However, the Court allowed the parties to revisit the issue if circumstances changed.
The plaintiffs later applied for direction from the Court, seeking an order to permit disclosure of the number of approved claims and total compensation paid. The Court found that circumstances had changed since the March 2024 application, as the claim period had ended, and all claimants consented to the requested disclosure. The Court clarified that it had jurisdiction to hear the later application based on the need to interpret its previous order rejecting the March 2024 application, which lacked an end date for the prohibition on disclosure.
The Court’s Analysis
The Court’s decision to permit disclosure hinged on several key findings:
- While the Court rejected the plaintiffs’ public policy argument, it determined that the confidentiality clause in the settlement agreement did not prohibit disclosure of the requested aggregate information based on the ordinary meaning of the agreement’s language.
- The settlement agreement’s inclusion of an apology from the City and a joint statement regarding the settlement contradicted the City’s argument for limiting public disclosure.
- The Court ruled that the information was not subject to settlement privilege or implied confidentiality that would prevent public disclosure.
Consequently, the Court permitted the disclosure of both the total number of women whose claims were approved and the total compensation paid. News outlets subsequently reported that the City paid over $9.5 million to 155 women, among the highest per person compensation for workplace sexual misconduct claims in Canada, and the first settlement of such a class action lawsuit against a Canadian municipality or fire department.
Key Takeaways for Employers
The decision highlights the importance of addressing allegations of sexual misconduct early, proactively, and sensitively. Early intervention is crucial for employers as it protects staff, while avoiding the substantial liabilities, costs, and heightened media scrutiny that often accompany class action proceedings. Employers should be aware of the potential consequences and act accordingly to mitigate risks.
Additionally, employers must recognize the limitations of settlement confidentiality provisions in class action settlements. When settling class action claims, it is essential to draft the relevant confidentiality language narrowly to ensure that disclosure of sensitive settlement details remains prohibited. This careful drafting can help prevent reputational harm to employers that may result from the public disclosure of such information.
The article in this client update provides general information and should not be relied on as legal advice or opinion. This publication is copyrighted by Hicks Morley Hamilton Stewart Storie LLP and may not be photocopied or reproduced in any form, in whole or in part, without the express permission of Hicks Morley Hamilton Stewart Storie LLP. ©
