Passenger Compensation NDAs Condemned by Judge

When Andrew Douglas wasn’t allowed to board his flight from Ottawa to Cuba due to a WestJet employee’s error, he likely had no idea the result would be a judicial ruling three years later that may affect the way airlines deal with passenger compensation.

CBC reports that the Ontario judge presiding over the case ruled that requiring a passenger to sign a non-disclosure agreement (NDA) as part of a compensation agreement is "problematic," a "serious defect" and that there should not be "strings attached" to receiving a "long-overdue refund."

Douglas’ case stems from 2022, when a WestJet employee told him (incorrectly) he was not allowed to check-in for his flight as he didn’t have negative COVID testing documentation. Douglas had information from the Cuba Tourist Board of Canada stating that such documentation was no longer required, but it didn’t make a difference and the flight departed for Cuba without Douglas.

When Douglas requested a refund, WestJet instead offered him a flight credit and refunded baggage fees. Douglas refused and sent a formal demand letter for a refund, which the airline didn’t respond to. Douglas decided it was time to take the airline to small claims court.

At several points throughout the process, WestJet offered Douglas compensation for the missed flight and a subsequent missed flight, then slightly increasing the offer until reaching $1,298. But each time it came with the caveat that he would have to sign the NDA and keep the deal confidential. Douglas felt that was an unfair ask, and refused to sign.

Eventually, the case made its way before the judge, where she ruled against the airline, condemning it for its insistence on an NDA. In her ruling, the judge wrote 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,” reports the CBC. "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.

Passenger rights advocate Gabor Lukas acknowledged the ruling as a positive thing for air passengers, telling CBC’s GoPublic: "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."

Confidentiality rulings have been a topic of discussion in air passenger rights groups recently. See Proposed CTA Amendments Raise Passenger Ire for more. 

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