Ontario judge condemns WestJet’s attempt to include gag order in settlement offer

Andrew Douglas says he was just fighting for compensation when he took WestJet to small claims court — instead, the dispute has resulted in what’s believed to be a landmark decision that can now be pointed to by all air travel passengers battling it out with the airlines. 

“Beware of seniors, they have a lot of time on their hands,” the 72-year-old Ottawa man told Go Public, referring to the fact that his dispute with WestJet began more than three years ago. 

In her decision on costs earlier this month, the judge condemned WestJet’s insistence that Douglas sign a non-disclosure agreement (NDA) in order to get compensation the airline owed him after he was incorrectly not allowed to board a flight to Cuba.

Nobody in Canada tracks how often NDAs are used, but experts in the airline industry say imposing confidentiality clauses in settlement offers is an increasingly common tactic, which is why this recent decision is so important. 

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An advocate for air passengers says the decision sends an important directive to the airline industry.

“Finally, a judge calls out an airline for trying to gag passengers,” said Gábor Lukács, founder and president of the Air Passenger Rights group. 

“That is a stern warning … they cannot get away with it.”

How it began

Douglas’s tale began on Jan. 31, 2022, at the Ottawa airport. 

He was headed to Cuba — a country he travels to regularly, visiting friends and bringing supplies to people in need, like the medicine he brought with him on a trip in January.

“I brought a lot of acetaminophen and ibuprofen because that’s hard to find,” he said.

But a WestJet agent told him — incorrectly — that he wasn’t allowed to check in, because he couldn’t provide proof of a recent negative Covid test. 

Douglas knew the regulations had recently changed, so he’d brought with him a printed page from the website of the Cuba Tourist Board of Canada, clearly stating that no Covid test was required for Canadians going to Cuba. 

But neither the WestJet agent nor a supervisor who was called in would listen when Douglas pleaded his case, or check the website themselves. 

The real burn, said Douglas, was that WestJet refused to refund his $410 ticket — offering instead to refund his baggage fees and give him a credit to take a later trip with the airline.

“I don’t want flyer points,” said Douglas. “I am not flying WestJet again.”

Turned away at the airport, he returned home and sent the airline a request for a refund via a registered demand letter — a formal, written request, asking the company to fulfil a legal obligation before he potentially took legal action. 

WestJet did not reply, so Douglas felt he had no option but to file in small claims court. 

“Who was ever going to believe that an airline would simply turn a passenger away for no good reason?” he said.

Because he had no legal background, Douglas headed to the Ottawa public library and found a book written by a former small claims court judge, explaining how a member of the public can take a case to court.

He also relied on information provided to him by Lukács, of Air Passenger Rights. 

He filed his case in March 2022.

WestJet asks for gag order

Five months later, Douglas received an email from WestJet, offering to pay $790 in compensation for his airfare and another flight he missed because he couldn’t take the trip. But the offer came with a hitch — the requirement that he sign an NDA — so Douglas declined the offer. 

Before a small claims case goes to court, there’s a settlement conference — where both sides try to come to an agreement before a judge, potentially avoiding a trial. 

At that hearing, WestJet again offered Douglas a refund of $790 and again required he sign an NDA — so once again, he turned down the offer.

WestJet made two more offers, slightly increasing the amount of the refund each time, but still requiring that Douglas keep silent. So he turned those down, too.

One week before the trial was set to begin, WestJet upped its offer again — to $1,298 — still requiring a gag order and warning Douglas that there would likely be consequences if he lost in court. 

“Should you choose not to accept this offer and proceed unnecessarily to trial, we expect to receive instructions from our client to seek penalties and costs against you,” wrote Anika Garlick, the lawyer for WestJet.

Still, Douglas refused to settle.

“It’s not about the money. It’s the point of the argument,” he said. “This buying silence has to stop.”

Air passenger advocate Lukács says he sees nothing wrong with people settling without going to court, as long as the offer is reasonable and, importantly, that passengers are at liberty to speak about what happened.

“Because we are talking about money that is owed to them under law,” said Lukács. “It is not a goodwill gesture. It’s not a handout … It is simply what is owed the passenger — and there should be no confidentiality whatsoever there.”

Judge condemns WestJet

In her ruling, the judge ordered WestJet to refund Douglas for his airfare and costs he incurred travelling to and from the airport and filing his lawsuit. 

She also condemned WestJet for trying to impose a confidentiality clause, saying it was “problematic,” a “serious defect” and that there should not be “strings attached” to receive a “long-overdue refund.”

She wrote that WestJet would not be asking for an NDA unless there was a financial advantage to it, and that the advantage was apparently “worth the trouble and expense of a trial to the defendant not to offer settlement without it.”

“This decision sends a clear message to the airlines that if an amount is undisputed, the airline should pay it,” said Lukács.

A lawyer who has studied the use of confidentiality clauses within Canada’s air travel industry calls the decision “well-reasoned” and a win for air travel passengers.

“This decision could indeed change the way airlines litigate — and for the better,” said Paul Daly, Research Chair in Administrative Law and Governance at the University of Ottawa. “It would mean more information in the public domain.”

Douglas, who waited almost three years for his day in court, said he was pleased with the judge’s harsh criticism of WestJet’s use of an NDA.

“It’s pretty strong language,” he said. “But I feel it’s justified the way I was mistreated.”

The judge also slapped the airline with an additional $410 penalty for withholding money it owed the 72-year-old plaintiff for so long — a delay she found “particularly vexing.”

“A penalty in a lesser amount would be insufficient to deter the defendant from repeating this conduct in other cases,” she wrote, chastising WestJet for not paying up for more than two years and seven months after the start of litigation.

“Courts cannot condone hardball tactics,” wrote the judge. “Especially in circumstances where there is a power imbalance between a corporate litigant (here the second largest airline in Canada) and an individual.”

All told, the judge ordered WestJet to pay Douglas $2,118 — plus interest from day one of the dispute.

WestJet declined an interview request from Go Public. 

In a statement, an airline spokesperson wrote that confidentiality clauses are “fundamental to ensuring that both parties can transparently explore both the unique circumstances and the unique solution which may be available and lead to common ground.”

Douglas wants ‘denied boarding’ definition changed

Meanwhile, Douglas hopes to help strengthen other protections for air travellers.

He’s made a submission to the Canadian Transportation Agency (CTA) regarding the definition of “denied boarding” in proposed changes to the Air Passenger Protection Regulations. As it stands, travellers can only file for “denied boarding” if they can prove a plane is overbooked (a practice also known as “bumping”).

That’s why Douglas couldn’t file a complaint about his WestJet dispute with the CTA and had to go to court — his situation wasn’t covered under the current regulations. 

He wants Canada to align with the European Union’s definition of “denial of boarding” that would limit a carrier’s ability to deny compensation to passengers with a confirmed reservation only if they show up late for check-in, don’t have valid travel documents, or refuse to comply with health, safety or security requirements.

“Then in instances like mine, where you’re just wrongly refused transport, you would be compensated exactly the same as if the plane had been overbooked,” said Douglas.

The Air Passenger Rights group has also submitted to the CTA a 27-page analysis of the proposed “denied boarding” regulation — it, too, is calling for similar protections provided in Europe.

A strong message to the airline industry 

Lukács says he will post Douglas’s small claims court victory on his group’s Facebook page, so others can use it to fight gag orders in disputes against airlines.

He calls it a strong message to the entire airline industry to smarten up.

“Wasting for years the passengers’ time, the legal system’s time, judges, clerks, tens of thousands of dollars in public money for a $1,000 dispute,” Lukács said. “That is not how we want to use our public resources in Canada.”

Douglas says he’s proud to be behind a case that will likely help a lot of other frustrated airline passengers. But he says no one “in their right mind” would spend three years just to win back what they’re owed.

“Don’t go to court for money,” he said. “Go to court because they’re really treating you badly. And you deserve justice.”