By Barry W. Kwasniewski and Martin U. Wissmath

“Subject to documentation” language will not, on its own, stop a binding settlement from forming once there is acceptance of the essential terms. Settlement negotiations in wrongful dismissal matters often conclude by email, with formal minutes to follow. In Johnstone v. Loblaw, released August 18, 2025, the Ontario Superior Court of Justice enforced a settlement following a without-cause termination, despite the employee’s refusal to execute the minutes of settlement. For charities and not-for-profits, the decision is a practical reminder that settlement authority and email wording can effectively conclude a matter, even where formal documentation follows later.

The plaintiff, Mr. Johnstone (the “Employee”), was employed for just over seven years before his employment was terminated without cause shortly after he relocated in 2022 from Winnipeg to Ottawa for work. The defendant, Loblaws Companies Limited (the “Employer”), terminated the Employee’s employment in April 2022 and offered a severance package that included seven months’ salary continuance and benefits. Settlement discussions followed through legal counsel, with the parties exchanging offers over several weeks that addressed notice, benefits, legal fees, reference letters, and housing-related issues connected to the Employee’s relocation. Ultimately, the Employer offered eight months’ salary continuance, a contribution to legal fees, and employment confirmation and reference letters. The Employee’s counsel responded by email confirming instructions to accept the proposal, “subject to mutual agreement on the supporting documentation.” Draft minutes of settlement were later provided, but the Employee did not sign them and subsequently commenced an action seeking wrongful dismissal damages and additional compensation related to losses arising from the Employee’s uncompleted purchase of a home following termination.

The court was asked to determine whether the parties had entered into a binding settlement agreement and, if so, whether the settlement and release barred the Employee’s claims relating to housing-related losses following termination. While an “agreement to later agree” on an essential provision is not enforceable, the court stated,

The parties must have had a meeting of the minds, which is clear to an objective reasonable bystander. Where an agreement is not reduced to a single document but is as a result of a series of negotiations, the court should consider in combination what the parties have said, done, or written. The agreement on essential terms must be clear, able to be determined with reasonable certainty, and not too vague to be enforced.

It is not necessary for documentation to be completed in order to have a binding settlement, the court found.

According to the court in this case, the essential terms — including the eight-month period for reasonable notice, continuation of benefits, legal fee contribution, and the provision of a standard release — had been agreed upon. The court placed weight on an email from the Employee’s lawyer confirming acceptance of the Employer’s most recent proposal, holding that it objectively demonstrated an intention to be bound to the terms of settlement.

The court rejected the argument that later concerns about housing, relocation expenses, or performance ratings were merely matters of “supporting documentation.” Instead, they were attempts to renegotiate essential terms after agreement had been reached. “Buyer’s remorse,” the court stated regarding the Employee, “a change of heart, or even growing concern about his ability to close his house purchase do not entitle him to renege on a settlement.” The court also dismissed the argument that the release should be interpreted narrowly to permit separate claims for housing-related losses, finding that those issues had been expressly negotiated as part of the settlement discussions and fell within the scope of the release.

The settlement was enforced and the action dismissed in its entirety. For charities and not-for-profit employers, the decision serves as a caution that settlement negotiations with terminated employees can crystallize into binding agreements even before formal documents are executed. Clear acceptance language, particularly where legal counsel confirms instructions to accept, will carry significant weight, and courts are unlikely to permit parties to reopen negotiations by characterizing unresolved concerns as documentation issues once the essential terms have been settled.

​Read the January 2026 Charity & NFP Law Update