It is often assumed that a settlement is not final until a formal settlement and release have been executed; however, a recent decision from the Ontario Superior Court in Stribling v. Starbucks Coffee Canada 2026 ONSC 1030 reminds parties that this assumption can be misleading.
In Stribling, the employee, who had been experiencing performance issues, was placed on a leave of absence. Starbucks Coffee Canada subsequently presented him with two options: return to full-time work or accept a separation package.
After requesting multiple extensions to consider the offer, the employee ultimately sent an email stating:
“I have decided to accept Starbucks’ offer… of a mutual separation… I will sign the DocuSign release once I receive it.”
However, despite this clear statement, the employee never signed the release and commenced legal proceedings against Starbucks.
The employee testified that he chose to pursue litigation after securing a loan.
The Court’s Decision
The Ontario Superior Court of Justice held that the employee’s email constituted a binding and enforceable acceptance of the settlement offer even in the absence of a signed release.
The Court emphasized that while the details of the release were communicated after the employee’s acceptance, since the essential terms were already settled, this does not invalidate the agreement.
In other words, once the essential terms of a settlement are agreed upon, a binding contract may exist even if the formal release has yet to be executed.
Conclusion
This case serves as a reminder that settlement agreements can crystallize earlier than parties might expect. Both employers and employees should be mindful that once an offer is accepted, even informally, they may already be legally bound by its terms.
If your business has ongoing litigation matter or is negotiating a settlement agreement, please feel free to reach out to the undersigned for assistance to be certain that you settle on terms you are comfortable with.
Ariel Dorfman, Associate Lawyer