Skip to Content

Prince Edward Island’s new Non-Disclosure Agreements Act

Jacob Zelman and Kate Profit

Prince Edward Island’s Non-Disclosure Agreements Act (“Act”) received royal assent on November 17, 2021 and is set to come into force on May 17, 2022.

The purpose of the Act is stated as being “to regulate the content and use of non-disclosure agreements”. As the first legislation of its kind to be enacted in Canada, PEI will become Canada’s first province to impose limits on the use on non-disclosure agreements (“NDAs”). The Act’s uniqueness also leaves considerable uncertainty around how the Act will be applied and interpreted by adjudicators.

The legislation purports to significantly limit confidentiality clauses as part of the settlement of any alleged harassment or discrimination claims. While specifics around the Act’s interpretation remain to be seen, the Act’s provisions and its language suggest the following:

  • While the motivation for the Act may have been the increased scrutiny applied to NDAs in cases of sexual harassment, the Act’s application appears to be much broader. In addition to “actions, conduct or comments of a sexual nature”, the Act applies broadly to:

(a) harassment, defined under the Act as “any action, conduct or comment that can reasonably be expected to cause offence, humiliation or other physical or psychological injury or illness to a person”; and
(b) discrimination, as defined under PEI’s Human Rights Act.

  • The Act prohibits NDAs covering the above subject matter entered into by a “party responsible.” As defined under the Act, a “party responsible means a person who has an obligation in law to take reasonable steps to prevent harassment and discrimination in the place where the harassment or discrimination occurred or is alleged to have occurred.” This provision has direct application to employers in light of their explicit duty under PEI’s Workplace Harassment Regulations to identify and stop harassment in the workplace along with remedying the effects and preventing future incidents of harassment.
  • Non-disclosure can only be part of the agreement if “it is the expressed wish” of the employee alleging harassment or discrimination. Where the agreement is lawfully entered into, it will be enforceable only where:

(a) the relevant employee has had a reasonable opportunity to receive independent legal advice;
(b) there have been no undue attempts to influence the relevant employee in respect of the decision to enter into the agreement;
(c) the agreement does not adversely affect the health or safety of a third party, or the public interest;
(d) the agreement includes an opportunity for the relevant employee to decide to waive their own confidentiality in the future and the process for doing so; and
(e) the agreement is of a set and limited duration.

Non-compliance with the above requirements may attract a fine of “not less than $2,000 or more than $10,000.

  • Finally, in the event an NDA has been entered into in accordance with the above requirements, disclosure of the subject matter of the NDA will be permitted in specific circumstances (for example to friends, family, counsellors, care providers, lawyers, etc.) and disclosure is permitted if considered “general artistic expression” in relation to the harassment or discrimination. Of importance, the classes of persons to which disclosure is permitted apply retroactively (i.e. to past agreements that include confidentiality requirements) so as to allow disclosure of the subject matter of past agreements to these outlined classes of individuals.

While the full scope of the Act’s application and interpretation is yet to be seen, of certainty is the need for employers to update their practices and the language of any agreements to which the Act may apply so as to ensure compliance with the Act. We encourage employers to seek legal advice from our team as they navigate the changes brought on by the Act.


This client update is provided for general information only and does not constitute legal advice. If you have any questions about the above, please contact a member of our Labour and Employment group.

 

Click here to subscribe to Stewart McKelvey Thought Leadership.

Archive

Privacy rights in the workplace: Supreme Court expands charter protections for public school teachers

BY Chad Sullivan & Chiara Nannucci

By Chad Sullivan and Chiara Nannucci Introduction A recent Supreme Court of Canada decision (York Region District School Board v. Elementary Teachers’ Federation of Ontario, 2024 SCC 22) has once…

Read More

New rules allowing Nova Scotia private sector employers to join Public Service Superannuation Plan take effect

BY Dante Manna & Noah Archibald

By Dante Manna and Noah Archibald The Provincial Government recently proclaimed the Private Sector Pension Plan Transfer Act (the “Transfer Act”) and newly released regulations on February 4, 2025. The…

Read More

Outlook for 2025 proxy season

By Andrew V. Burke, Colleen P. Keyes, Gavin Stuttard, David F. Slipp and Logan G. Walters With proxy season on the horizon, many public companies are once again preparing their…

Read More

Here we go again … how recent updates to Canada’s supply chain transparency reporting guidance may impact your 2025 reporting obligations

By Christine Pound, Colleen Keyes, K.C., and Daniel Roth As reporting entities and government institutions prepare their supply chain transparency reports, Public Safety Canada (“PSC“) has updated its guidance for…

Read More

Energy Watch 2025

Stewart McKelvey is pleased to present Energy Watch – a review of key legislative and policy advancements in the renewable energy sector in 2024 in Newfoundland and Labrador, Nova Scotia and New Brunswick and a look forward to anticipated activities in 2025.

Read More

Land use planning in Prince Edward Island – the year in review

BY Curtis Doyle

By Curtis Doyle Once again, the time has come to review the year that was and to chart the course for the year ahead. For municipalities and planning professionals in…

Read More

The impact of possible tariff changes on Canadian importers and strategies for consideration (Part II)

BY Michelle Chai & Graeme Hiebert

By Michelle Chai and Graeme Hiebert This is the second in a two-part Thought Leadership series. To read Part I, click here. Appearance, design, best use, marketing and distribution While the…

Read More

Canada’s Energy Story: Energy Transition

Lawyers from our Energy Group were pleased to be featured in the latest issue of Canada’s Energy Story, an annual compendium of energy sector articles published by the Energy Council…

Read More

The impact of possible tariff changes on Canadian importers and strategies for consideration (Part I)

BY Michelle Chai & Graeme Hiebert

By Michelle Chai and Graeme Hiebert On January 20th, 2025, Donald Trump will be inaugurated as President of the United States. He has promised to swiftly impose tariffs on all…

Read More

Canada’s new criminal rate of interest takes effect

BY David Wedlake & Noah Archibald

By David Wedlake and Noah Archibald The Federal Government’s changes to the criminal rate of interest under the Criminal Code came into effect on January 1, 2025. These changes reduced…

Read More

Search Archive