When artificial intelligence is discriminatory

May 16, 2017

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Artificial intelligence has undergone significant developments in the last few years, particularly in respect of what is now known as deep learning.¹ This method is the extension of the neural networks which have been used for a few years for machine learning. Deep learning, as any other form of machine learning, requires that the artificial intelligence system be placed before various situations in order to react to situations which are similar to previous experiences.

In the context of business, artificial intelligence systems are used, among other things, to serve the needs of customers, either directly or by supporting employees interventions. The quality of the services that the business provides is therefore increasingly dependent on the quality of these artificial intelligence systems.

However, one must not make the mistake of assuming that such a computer system will automatically perform its tasks flawlessly and in compliance with the values of the business or its customers.

For instance, researchers at the Carnegie Mellon University recently demonstrated that a system for presenting targeted advertising to Internet users systematically offered less well-paid positions to women than to men.²In other words, this system behaved in what could be called a sexist way. Although the researchers could not pinpoint the origin of the problem, they were of the view that it was probably a case of loss of control by the advertising placement services supplier over its automated system and they noted the inherent risks of large-scale artificial intelligence systems.

Various artificial intelligence systems have had similar failures in the past, demonstrating racist behaviour, even to the point of forcing an operator to suspend access to its system.³

In this respect, the European Union passed in April 2016 a regulation pertaining to the processing of personal information which, except in some specific cases, prohibits automated decisions based on some personal data, including the “racial or ethnic origin, political opinions, religious or philosophical beliefs, or trade union membership, and the processing of genetic data, biometric data for the purpose of uniquely identifying a natural person, data concerning health or data concerning a natural person’s sex life or sexual orientation […]”.⁴ Some researchers wonder about the application of this regulation, particularly as discrimination appears in an incidental manner, without the operator of the artificial intelligence system intending it.⁵

In Québec, it is reasonable to believe that a business which would use an artificial intelligence system that would act in a discriminatory manner within the meaning of the Charter of Human Rights and Freedoms would be exposed to legal action even in the absence of a specific regulation such as that of the European Union. Indeed, the person responsible for an item of property such as an artificial intelligence system could incur liability in respect of the harm or damage caused by the autonomous action of such item of property. Furthermore, the failure to having put in place reasonable measures to avoid discrimination would most probably be taken into account in the legal analysis of such a situation.

Accordingly, special vigilance is required when the operation of an artificial intelligence system relies on data already accumulated within the business, data from third parties (particularly what is often referred to as big data), or when the data will be fed to the artificial intelligence system by employees of the business or its users during the course of a “learning” period. All these data sources, which incidentally are subject to obligations under privacy laws, may be biased at various degrees.

The effects of biased sampling are neither new nor are they restricted to the respect of human rights. It is a phenomenon which is well-known by statisticians. During the WW II, the U.S. Navy asked a mathematician named Abraham Wald to provide them with statistics on the parts of bomber planes which had been most hit for the purpose of determining what areas of these planes should be reinforced. Wald demonstrated that the data on the planes returning from missions was biased, as it did not take into account the planes that were taken down during these missions. The areas damaged on the returning planes did not need to be reinforced, rather the places which were not hit were the one that had to be.

In the context of the operation of a business, an artificial intelligence system to which biased data is fed may thus make erroneous decisions – with disastrous consequences for the business on a human, economic and operation point of view.

For instance, if an artificial intelligence system undergoes learning sessions conducted by employees of the business, their behaviour will undoubtedly be reflected in the system’s own subsequent behaviour. This may be apparent in the judgments made by the artificial intelligence system in respect of customer requests, but also directly in its capacity to adequately solve the technical problems submitted to it. Therefore, there is the risk of perpetuating the problematic behaviour of some employees.

Researchers of the Machine Intelligence Research Institute have proposed various approaches to minimize the risks and make the machine learning of artificial intelligence systems consistent with its operator’s interests.⁶ According to these researchers, it would certainly be appropriate to adopt a prudent approach as to the objectives imposed on such systems in order to avoid them providing extreme or undesirable solutions. Moreover, it would be important to establish informed supervision procedures, through which the operator may ascertain that the artificial intelligence system performs, as a whole, in a manner consistent with expectations.

From the foregoing, it must be noted that a business wishing to integrate an artificial intelligence system in its operations must take very seriously the implementation phase, during which the system will “learn” what is expected of it. It will be important to have in-depth discussions with the supplier on the operation and performance of his technology and to express as clearly as possible in a contract the expectations of the business as to the system to be implemented. The implementation of the artificial intelligence system in the business must be carefully planned and such implementation must be assigned to trustworthy employees and consultants who possess a high level of competence with respect to the relevant tasks.

As to the supplier of the artificial intelligence system, it must be ensured that the data provided to him is not biased, inaccurate or otherwise defective, in such a way that the objectives set out in the contract as to the expected performance of the system may reasonably be reached, thus minimizing the risk of litigation arising from discriminatory or otherwise objectionable behaviour of the artificial intelligence system. Not only such litigation can be expensive, it could also harm the reputation of both the supplier and its customer.

LeCun, Y., Bengio, Y., & Hinton, G. (2015). Deep learning. Nature, 521(7553), 436-444.
Datta, A., Sen, S., & Zick, Y. (2016, May). Algorithmic transparency via quantitative input influence: Theory and experiments with learning systems. In Security and Privacy (SP), 2016 IEEE Symposium on (pp. 598-617). IEEE; Datta, A., Tschantz, M. C., & Datta, A. (2015). Also see: Automated experiments on ad privacy settings. Proceedings on Privacy Enhancing Technologies, 2015(1), 92-112.
Reese, H. (2016). Top 10 AI failures of 2016. The case of Tay, Microsoft’s system, has been much discussed in the media.
Regulation (EU) 2016/679 of the European Parliament and of the Council of April 27, 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation).
Goodman, B., & Flaxman, S. (2016, June). EU regulations on algorithmic decision-making and a “right to explanation”. In ICML Workshop on Human Interpretability in Machine Learning (WHI 2016).
Taylor, J., Yudkowsky, E., LaVictoire, P., & Critch, A. (2016). Alignment for advanced machine learning systems . Technical Report 20161, MIRI.

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Eric Lavallée
Partner, Lawyer and Trademark Agent

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August 1, 2024

Major change to the Canada Labour Code with new anti-replacement-worker provisions

Bill C-58, An Act to amend the Canada Labour Code and the Canada Industrial Relations Board Regulations, 2012, was passed on June 20, 2024, introducing anti-replacement-worker provisions to the Canada Labour Code. While anti-replacement-worker legislation has existed in Quebec since 1977, nothing of the sort existed for federal jurisdiction employers. Before Bill C-58, federal legislation only stipulated that an employer or a person acting on behalf of an employer could not use replacement workers “for the demonstrated purpose of undermining a trade union’s representational capacity rather than the pursuit of legitimate bargaining objectives.” Unions faced a heavy burden of proof to demonstrate that replacement workers were being used for this purpose. As a result, union activists have been pushing for decades for more protection during labour disputes. New anti-replacement-worker provisions Bill C-58 adds a new subsection to section 94 of the Canada Labour Code on unfair practices, which limits and regulates the use of replacement workers during strikes and lockouts. The new provisions no longer require unions to demonstrate the employer’s intention to undermine the union’s representational capacity and they prevent federal jurisdiction employers from using the services of any of the following persons to perform the duties of an employee who is in the bargaining unit on strike or locked out: Any employee hired after the day on which notice to bargain collectively was given. Any person who performs management functions or who is employed in a confidential capacity in matters related to industrial relations, if the person was hired after the day on which notice to bargain collectively was given. Any contractor, other than a dependent contractor, or any employee of another employer whose services were not being used on the day on which notice to bargain collectively was given. If, before the day on which notice to bargain collectively was given, an employer was using the services of a contractor or an employee of another employer and those services were the same as or substantially similar to the duties of an employee in the bargaining unit, they may continue to use those services during a labour dispute, so long as they do so in the same manner, to the same extent and in the same circumstances as they did before the notice was given. Any employee whose normal workplace is a workplace other than that at which the strike or lockout is taking place or who was transferred to the workplace at which the strike or lockout is taking place after the day on which notice to bargain collectively was given. Any volunteer, student or member of the public. Any employee who is in a bargaining unit on strike or locked out. However, the new provisions allow employers to use the services of such persons during a strike or lockout as long as the services are used solely to deal with a situation that presents or could reasonably be expected to present one of the following imminent or serious threats: A threat to the life, health or safety of any person. A threat of destruction of, or serious damage to, the employer’s property or premises. A threat of serious environmental damage affecting the employer’s property or premises. The use of the services must be necessary in order to deal with the situation because the employer is unable to use the services of the employees on strike or locked out. As in Quebec’s Labour Code, an employer may only rely on the services of a person referred to above for conservation purposes, and not for the purpose of continuing the supply of services or production of goods by the employer. Finally, the bill specifies that the employer must first offer these conservation duties to the employees who are on strike or locked out. The bill also includes provisions applicable to employers who contravene the anti-replacement-worker provisions. These offences can result in fines of up to $100,000 per day. The government may also ensure compliance with the new provisions by adopting regulations to establish an administrative framework with financial penalties. New provisions regarding the maintenance of activities during a strike or lockout In order to prevent imminent and serious threats to public health and safety, Bill C-58 provides that the union and employer must reach an agreement on the activities to be maintained in the event of a labour dispute. If no activities need to be maintained, the parties must still enter into an agreement to this effect. An employer and a union must enter into this agreement no later than 15 days after the day on which notice to bargain collectively was given to the Minister of Labour and the Canada Industrial Relations Board. If the parties do not reach an agreement, the matter will be brought before the Board at the request of one of the parties. The 72-hour strike or lockout notices referred to in section 87.2 of the Canada Labour Code may be given only once this agreement has been reached and a copy has been filed with the Minister and the Board, or if no agreement has been reached, if the Board has determined an application made by one of the parties. Coming into force Bill C-58 will come into force on June 20, 2025. Until then, the new anti-replacement-worker provisions will undoubtedly cause federal jurisdiction employers to seriously consider their bargaining power and level of preparedness for possible labour disputes. Our team is here to help you through this process.

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July 23, 2024

Requirements to Prevent and Reduce the Risk of Forced Labour or Child Labour: What Businesses Need to Know to Comply

On May 11, 2023, the Fighting Against Forced Labour and Child Labour in Supply Chains Act, S.C. 2023, c. 9 (the “Act”) was passed. The purpose of this Act is to implement Canada’s international commitment to contribute to the fight against forced labour and child labour, and to require certain entities to report on the measures they have taken to reduce the use of forced labour and child labour. The Act came into force on January 1, 2024, and reporting entities and federal institutions were required to submit their first report under the Act by May 31, 2024. In addition, Public Safety Canada (the “Government”) released the Guidance for reporting entities. Scope of the Act The Act applies to government institutions and to any corporation, partnership, trust or other unincorporated organization that (i) is listed on a stock exchange in Canada or (ii) has a place of business in Canada, does business in Canada or has assets in Canada and that, based on its consolidated financial statements, meets at least two of the following conditions for at least one of its two most recent financial years: (a) it has at least $20 million in assets (b) it has generated at least $40 million in revenue (c) it employs an average of at least 250 employees (collectively, the “entities”) Or (iii) is prescribed by regulations. The obligation to report applies to any entity (a) producing, selling or distributing goods in Canada or elsewhere; (b) importing into Canada goods produced outside Canada; or (c) controlling an entity engaged in any of these activities. Entities are considered to be operating in Canada if they produce, sell or distribute goods in Canada. They may also be considered to be operating in Canada if they have employees, if they make deliveries, purchases or payments in Canada, or if they have bank accounts in Canada. It is important to note that doing business in Canada does not require having a place of business in Canada. Forced Labour vs. Child Labour For the purposes of this Act, child labour is defined as labour provided by minors that (i) is provided or offered to be provided in Canada under circumstances that are contrary to the laws applicable in Canada; (ii) is provided or offered to be provided under circumstances that are physically, socially or morally dangerous to them; (iii) interferes with their schooling; or (iv) constitutes the worst forms of child labour, as defined in article 3 of the Worst Forms of Child Labour Convention.1 Forced labour is labour provided by a person (i) in circumstances in which it would be reasonable to believe that their safety or that of a person known to them would be threatened if they failed to provide such labour; or (ii) in circumstances which constitute forced or compulsory labour, as defined in article 2 of the Forced Labour Convention.2 Entities With Reporting Obligations Any entity required to report annually to the Government under the Act must include in its report the steps taken during its previous financial year to prevent and reduce the risk of forced labour and child labour. In order to comply with the obligations imposed by the Act, the entity must also include in its report information on its structure, its activities relating to the production, sale, distribution or importation of goods, as well as the type of goods and place of operation, and the countries or regions involved in its supply chains. Lastly, the report must include a brief explanation of the entity’s due diligence policies and processes regarding forced labour and child labour, information on the training provided to employees, and the parts of its business that carry a risk of forced labour or child labour. Given that the steps taken to prevent and reduce forced labour and child labour can result in a loss of income for vulnerable families, the Act requires entities to identify the measures taken to mitigate such impact on these families. Publication of Reports Entities must not only comply with the format, approval and attestation requirements for their report before submitting it to the Government but also make it available to the public by publishing it on a prominent place on their website. They can submit their report in one of the two official languages, although the Government recommends that reports be published in both English and French. In addition, the Act requires entities incorporated under the Canada Business Corporations Act or any other federal law to provide a copy of the report to each shareholder at the same time as their annual financial statements. Offences and Fines Reporting entities that fail to submit their report or make it available to the public are liable to a fine of not more than $250,000 per offence.3 The senior executives, directors and employees of an entity are also liable to fines and criminal prosecution should the entity contravene the Act.4 Any offence committed by an entity may also entail reputational risk. Our Advice Introducing policies, procedures, audit tools and other rules—or improving existing ones—to prevent and reduce modern slavery is essential. Such policies and rules may include procedures for reporting and an investigation process to address concerns, as well as a whistleblower protection system (whistleblower policy or similar measures). Businesses should think about how they select suppliers and whether they should adopt rules for monitoring the activities of their suppliers and partners. They should also consider updating their agreements with existing suppliers or partners to ensure compliance with the requirements of the Act, in particular by including provisions prohibiting the use of forced labour or child labour in suppliers’ business activities. Other measures may include raising awareness and training staff, directors and officers on how to implement company policies and procedures aimed at identifying and preventing forced labour and child labour. Our team has developed tools to help reporting entities identify the parts of their business that carry a risk of forced labour or child labour. We will be monitoring upcoming government publications in response to the first reports that reporting entities submit and, if need be, we will release another article to clarify reporting obligations. For any questions or advice relating to your obligations under the Act, do not hesitate to contact our team. Section 1 of the Act; see also the Worst Forms of Child Labour Convention, adopted in Geneva on June 17, 1999, article 3: Link Section 1 of the Act; see also the Forced Labour Convention, adopted in Geneva on June 28, 1930, article 2: Link Section 19 of the Act. Section 20 of the Act.

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July 23, 2024

Sponsorship agreements in the sports world: the promise of fame and exposure

“I was outraged!” “It beggars belief!” “It’s ridiculous!”1 These are just a few of the comments heard in connection with a controversial clause in Neymar’s contract with the Saudi Arabia-based Al Hilal soccer club, which he signed in August 2023. It provided for a payment of approximately $500,000 for each Instagram post promoting Saudi Arabia... In stark contrast, other observers applauded this initiative, viewing Neymar as the harbinger of an era in which sports talent would finally be valued for its true worth. Even before he’d laced up his cleats for his new team, Neymar was already shining a warm spotlight on the Saudi kingdom. At a press conference on September 7, 2023, the Brazilian forward cheekily likened France’s League 1, in which he used to play (it is ranked the fifth-best soccer league in the world) to Saudi Arabia’s (ranked 36th): “Considering all the big names in this League, this championship may well be better than League 1.”2 Needless to say, his comment sparked a tidal wave of reactions. For comparison purposes, Major League Soccer (MLS), CF Montreal’s home league, is ranked #29 in the world. Thriving on competition, passion and adrenalin, the sports world is fertile ground for sponsorship agreements. These arrangements serve as strategic alliances that capture the essence of contemporary sports and transcend the limits of the games involved. In our last two articles, we took a look at issues surrounding the naming of sports teams, followed by agreements governing the naming of stadiums and arenas. This time around, we will delve into the topic of sponsorship agreements. In addition to defining what they are, we will focus on how these agreements are used and structured, including their objectives and associated risks. WHAT ARE SPONSORSHIP AGREEMENTS? Sponsorship agreements, also known as sponsorship deals, are commercial agreements entered into by a beneficiary (an organization, individual or event) and a sponsor (a company or brand). As a general rule, these agreements provide financial compensation, goods and/or services in return for visibility, promotional impact or the sponsor’s association with the beneficiary. To be sure, such deals are not exclusive to the sports world. However, sports have definitely played a key role in how these agreements have evolved, transforming them into tools at the forefront of commercial progress. In this article, we will focus on how these agreements are used in the sports world. THE POWER OF SPONSORSHIP AGREEMENTS In essence, sponsorship agreements enable a sponsor to benefit from the exposure, fame and/or positive image associated with an athlete. At the same time, they may allow athletes to boost their own visibility and develop their own brands in partnership with the sponsor. The film Air, initially released in cinemas in 2023 and now exclusively available on the Prime Video streaming platform, depicts the dynamic of sponsorship agreements. It retraces the origins of the emblematic partnership between Nike and basketball legend Michael Jordan, which ended up redefining how athletes approach business partnerships. The Nike partnership gave rise to Air Jordan, the world-famous line of basketball shoes, marking an initial milestone in the history of sponsorship deals. In April 1985, the first series of Air Jordans came onto the market (see Figure 2); Nike was aiming for $3 million in sales over an initial three-year period. However, by the end of the first year alone, sales topped an impressive $126 million. In 2022, it was reported that Michael Jordan had earned between $150 million and $256 million just from his contract with Nike. KEY OBJECTIVES OF SPONSORSHIP AGREEMENTS FOR ATHLETES Main objective: financial gain Quite often, the main objective is financial gain. In addition to Michael Jordan, other star athletes have signed agreements with Nike. LeBron James’ and Cristiano Ronaldo’ own deals with Nike are reportedly valued at US$1 billion. Meanwhile, Argentina’s Lionel Messi, the eight-time Ballon d’Or winner, entered into a similar agreement with the brand Adidas. The case of Michael Jordan, however, is unique insofar as a family of strong and distinctive brands was developed, including Air Jordan and various logos representing Michael Jordan playing basketball. This brand family is owned by Nike, although it is inherently linked to the athlete reaping its benefits. In Quebec, tennis player Félix Auger-Aliassime, a victim of his recent success, signed agreements with Dior and Renault in early 2023 as these companies added their names to his existing list of sponsors, which included Adidas. The compensation paid by these brands has not been disclosed, but Félix is now displaying the Renault logo on his T-shirts—even more prominently than the brand of the T-shirt itself. Objective: enhanced reputation and greater credibility Reputation and credibility are vitally important in the sports world. Teaming up with a reputable sponsor can boost an athlete’s credibility in the eyes of fans, the media, potential partners and other teams. As with naming rights agreements, upholding the same values and selecting the right sponsor are the key to these agreements. Consider Félix Auger-Aliassime’s remarks after signing his deal with Renault: “I’m proud to be associated with Renault because we share the same ambitions and values […].”3 Chelsea FC, which competes in England’s Premier League, kicked off its 2023-204 season without its main sponsor. In addition, there was no corporate logo displayed on the front of the players’ jerseys, even though that has become the norm in the soccer world. In fact, Chelsea had signed an agreement with Stake.com, an online casino that describes itself as a pioneer in the area of crypto sports betting. As soon as the deal was announced, fans made their displeasure known: Chelsea Supporters’ Trust, which serves as the voice of the team’s fans, declared: “We understand CFC’s desire to maximise revenue streams across the whole club. Whilst we accept that will happen, it must not take place at the expense of the club’s values.”4 Chelsea thus terminated the agreement but appears to have found a new partner, the US-based technology company Infinite Athlete. That deal is valued at around $66 million per year. Objective: an equitable relationship between the parties (student athletes) For some athletes, sponsorship agreements are also a way to establish an equitable relationship between all parties, ensuring that they do not lose out on any benefits derived from their name, image or likeness. This is certainly the case for student athletes competing in the American university system, particularly the National Collegiate Athletic Association (NCAA). In June 2021, the US Supreme Court ruled that the NCAA was not legally authorized to limit payments related to students’ education. This gave rise to what are known as “NIL deals”(name, image, and likeness). Student athletes are now entitled to enter into sponsorship agreements covering their name, image and likeness (the latter term refers to any representations of the athlete, whether in videogames, cartoons, etc.). The champion of NIL deals is undoubtedly Olivia Dunne, a gymnast at Louisiana State University. She is one of the first student athletes to become a millionaire thanks to these deals; she is certainly the best known (Figure 6). Her arrangements with brands such as American Eagle, Forever 21 and Vuori have generated more than $4.7 million. She ranks third in earnings in the list of athletes with NIL deals, just behind quarterback Arch Manning at $5.1 million (nephew of former football players Peyton and Eli Manning) and basketball player Bronny James at $9.7 million (son of LeBron James). Will we ever see NIL deals for student athletes in Quebec? KEY OBJECTIVES FOR SPONSORS As far as sponsors are concerned, their objectives are usually quite similar. They hope to obtain greater visibility and promotion by linking their brand, products or services to a famous professional athlete. This may entail significant media exposure while targeting a specific segment of the public. This was what lululemon had in mind when it partnered with Connor Bedard, the most recent #1 draft choice in the National Hockey League (NHL). The company, which started out selling yoga wear, is now reaching out to hockey fans in a bid to strengthen its reputation as a top-of-the-line sports apparel retailer. In the run-up to the NHL draft, the name of Connor Bedard—a once-in-a-generation talent—was on everyone’s lips. His endorsement deal with lululemon was announced a few days before the draft, thanks in part to a video in which he said: “If I make this shot, I’ll join lululemon as their newest ambassador.” He then executed a perfect shot, adding a dramatic note to the announcement (Video 1). Video 1: Announcement marking the sponsorship agreement between lululemon and Connor Bedard. Following the partnership announcement, Connor Bedard said: “Being from Vancouver, I’ve been a fan of lululemon for as long as I can remember. The gear is so comfortable, stylish, and great for training.”5 Since the company was founded in Vancouver, it is understandable that this partnership is seeking to capitalize on a shared sense of belonging. Obviously, sponsors are also seeking to boost their sales or profitability via increased exposure and visibility derived from a sponsorship deal. Gaining access to a specific target audience heavily engaged in the athlete’s chosen sport can be a major selling point. HOW SPONSORSHIP AGREEMENTS ARE STRUCTURED As regards structure, sponsorship agreements differ in terms of the breadth and scope of the visibility being sought. Structure of local sponsorship agreements Local sponsorship agreements are entered into when: A local company decides to fund an athlete or a sports event. A company sponsors a local athlete or a local sports organization. A local sponsorship agreement does not necessarily mean a smaller-scale deal. RBC’s and Air Canada’s sponsorship arrangements, under which their respective logos are featured on Montreal Canadiens jerseys, are examples of local agreements. Structure of national or international sponsorship agreements Seeking much more extensive visibility, national or international sponsorship agreements are typically larger-scale initiatives. More sophisticated and with farther-reaching ramifications, these types of agreements must also take into account issues spanning multiple jurisdictions. Compensation structure In certain major agreements, the athlete’s financial compensation structure may vary widely. Fixed and pre-determined compensation is typically the norm. Understandably, agreements in which a trademark linked to an athlete is used for a specific product line may include royalties or tiers (thresholds) associated with the products’ commercial performance. Duration impacts the structure of sponsorship agreements Sponsorship agreements also vary in terms of their duration. A company may decide to sponsor an athlete for a lengthy period or for a one-time event or competition. On September 13 2023, the new Professional Women’s Hockey League (PWHL) announced its very first sponsor: Canadian Tire Corporation (CTC). Strictly speaking, this is an international agreement because the PWHL operates in both Canada and the US. At the time, Sarah Nurse, a forward with PWHL Toronto, said: “Through numerous conversations with their key leaders, it has always been clear that [CTC was] committed to supporting a women’s hockey league. It is no surprise that CTC is an inaugural partner now that we have launched the PWHL. With our shared values and vision, I know that CTC will continue to put women’s hockey at the forefront”6. RISKS OF SPONSORSHIP AGREEMENTS: WHAT YOU NEED TO KNOW There are also a number of risks associated with signing a sponsorship agreement. Professional athletes are continually being placed under a microscope. Everything they do has a potential impact on their sponsors. Morality clause Consider the case of golfer Tiger Woods, who was embroiled in a personal scandal back in 2010 that left his reputation in tatters. Seeking to avoid being associated with this loss of reputation, various companies and organizations terminated their deals with him (Table 1). Table 1: List of sponsors that terminated or continued their involvement with Tiger Woods in the wake of his scandal. Today, Nike and Upper Deck are still associated with Tiger Woods, along with 10 new sponsors. To enable the parties to terminate agreements easily and at no charge should any situations akin to that of Tiger Woods arise, sponsorship agreements typically include a morality clause (also known as a “morals clause”). Morality clauses impose “good conduct” obligations on athletes and stipulate that if they engage in any actions that could tarnish or harm their own reputation or that of their sponsor, the sponsor has the right to suspend or unilaterally terminate the agreement. It was thanks to this clause that Gatorade and Gillette, to take only two examples, ended their agreements with Tiger Woods. The first morality clause in the sports world was included in the employment contract of Babe Ruth, the renowned baseball player with the New York Yankees in the 1920s. Reciprocal clause One might think that certain athletes would prefer to have a reciprocal clause in place enabling them to cut ties with any sponsor whose reputation is marred by scandal (inhumane work conditions, pollution, financial wrongdoing, etc.). Although less frequent, these clauses could still prove useful, especially now that society is calling on the corporate world to conduct itself more ethically. On the credit side of the ledger, an athlete who stands out positively off the playing field may end up attracting new sponsors. On September 24, 2023, the pop singer Taylor Swift was spotted at a Kansas City Chiefs game, cheering on tight end Travis Kelce (Figure 9). Given Taylor Swift’s unprecedented levels of public adulation, Travis Kelce saw his social networks explode with 500,000 more followers; sales of his jerseys soared by 400% in less than a week. Sponsors are well known for appreciating the value of athletes associated with another celebrity, e.g. Tom Brady and Gisele Bündchen, or David and Victoria Beckham. Kelce, who is already pocketing $3 million annually from his sponsorships, now has the door wide open for some shiny new deals. Conclusion All in all, sponsorship agreements play a pivotal role in the sports world. Above and beyond the financial benefits they generate, they reflect the values and identity of the partners involved. Transcending transactional considerations, these deals have turned into alliances that stimulate growth, emotional engagement and long-term viability. They embody shared passions for sports and an ongoing quest for excellence. As the sports world evolves and new opportunities emerge, we should continue to question how these agreements align with our collective values. In the future, these partnerships will not just be a critical component of commercial strategies; they will also be statements of principle. And they will continue to shape how sports are lived, perceived and experienced. Chronique de Ray Lalonde, August 16, 2023 Link. Ouest-France, Neymar: “Peut-être que le championnat d’Arabie saoudite est meilleur que la Ligue 1”, September 8, 2023 Link. QMI Agency, Nouvelle alliance entre Félix Auger-Aliassime et Renault, TVA Sports, January 25, 2023 Link. Ryan Dabbs, Why don't Chelsea have a sponsor for their new kit?, FourFourTwo, July 19, 2023 Link. Matt Carlson, Conor Bedard signs… with lululemon, The Hockey News, June 28, 2023 Link. News release, Professional Women’s Hockey League, Canadian Tire Corporation joins the PWHL with a landmark multi-year agreement, September 13, 2023 Link.

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July 18, 2024

Harassment and Violence in the Workplace: An Overview of Recent Legislative Changes Introduced by Bill 42

Introduction In 2020, faced with statistics showing that nearly one in two women and three in ten men believed they had suffered sexual harassment or assault in the workplace,1 the Minister of Labour expressed its intention to help prevent and address this issue. The government began by setting up a committee to examine cases of sexual harassment and assault (the “Committee”). Its mandate was to analyze how such cases are handled in workplaces across the province.2 The Committee made over 82 recommendations in its report titled Mettre fin au harcèlement sexuel dans le cadre du travail : Se donner les moyens d’agir [putting an end to sexual harassment in the workplace by developing the means to act], which was prepared in collaboration with law enforcement agencies and further to consultations with various stakeholders, including community groups, unions and employers , as well as groups of women workers. The government included a number of recommendations from the report into Bill 42.3 This Bill, which is aimed at preventing and fighting psychological harassment and sexual violence in the workplace, was assented to on March 27, 2024. It introduces major amendments to various labour laws, which are likely to change existing practices within organizations. The following is an overview of these amendments and their potential impact. A. Occupational health and safety The Act respecting occupational health and safety was first amended to introduce a definition of what constitutes“sexual violence,” whichcame into force on March 27, 2024, and reads as follows: Any form of violence targeting sexuality or any other misconduct, including unwanted gestures, practices, comments, behaviours or attitudes with sexual connotations, whether they occur once or repeatedly, including violence relating to sexual and gender diversity.4 This broad definition could very likely affect existing employer policies and give rise to a host of problems needing to be resolved by the courts to ensure proper application. Action programs and prevention programs [effective October 6, 2025]: When developing an action program (for businesses with 20 workers or less) or a prevention program (for businesses with 20 workers or more), employers will be required to identify and anticipate psychosocial risks and risks related to sexual violence that may affect workers in their establishments.5 B. Industrial accidents and occupational diseases New legal presumptions of employment injury [effective September 27, 2024]: The Bill introduces two new legal presumptions of employment injury to reduce the burden of proof for victims of sexual violence in the following situations: Where injuries and diseases are the result of sexual violence suffered by a worker and perpetrated by the worker’s employer, one of the employer’s executives in the case of a legal person or a worker whose services are used by such employer; and Where a disease occurs within three months after the worker has been the victim of sexual violence. The burden will then be on the employer contesting an injury of this nature to reverse the application of these presumptions. Handling employment injury claims will be even more difficult, as Bill 42 provides that employers will not have access to workers’ medical records prior to hearings before the Administrative Labour Tribunal. Employers prohibited from accessing medical records [effective September 27, 2024]: Bill 42 sets out stricter obligations for health professionals designated by employers. Only the health professional designated by an employer will have access to the medical record in the possession of the Commission des normes, de l’équité, de la santé et de la sécurité du travail concerning the worker’s employment injury.6 It will not be possible for the employer to obtain all information concerning a worker’s medical condition, because the health professional will be required to limit disclosure to only the information needed to provide the employer with a summary of the file and an opinion on how to handle the employment injury claim.7 The prohibition on access to medical records also carries important fines ranging from $1,000 to $5,000 for a natural person and from $2,000 to $10,0008 for a legal person. However, it does not preclude employers from obtaining medical records concerning the employment injury by way of an authorization or subpoena. Extension of time limit for filing a claim [effective September 27, 2024]: The new time limit for filing a claim for an injury or disease resulting from sexual violence is two years.9 In all other cases, the time limit for filing a claim is six months from the occurrence of the injury.10 Cost of benefits imputed to all employers [effective March 27, 2024]: As an exception to the principle that employers must cover the costs associated with employment injuries, where an employment injury is the result of sexual violence suffered by a worker, the Bill provides that the cost of benefits will automatically be imputed to the employers of all the units.11 However, we must bear in mind that the imputation of costs to all units will have repercussions as it will lead to an increase in the cost of compensation regime for all employers. C. Labour standards Bill 42 also introduces a number of amendments to the Act respecting labour standards, including the following. Adjustments to harassment prevention and complaint processing policies [effective September 27, 2024]: Such policies must now include: The methods and techniques used to identify, control and eliminate the risks of psychological harassment, including a section on behaviour that manifests itself in the form of verbal comments, actions or gestures of a sexual nature. The specific information and training programs on psychological harassment prevention that are offered to workers and the persons designated by the employer to handle complaints or reports. The recommendations on behaviour to adopt when participating in work-related social activities. The applicable procedures for making complaints or reports to an employer or providing an employer with information or documents; details about the person designated to handle complaints or reports; and information regarding the employer’s obligation to follow up. The measures to protect the persons concerned by a psychological harassment situation and those who cooperated in processing a complaint or report regarding such a situation. The process for managing psychological harassment situations, including the process applicable to inquiries conducted by employers. The measures to keep complaints, reports, information or documents received confidential and, for the documents made or obtained in the course of managing a psychological harassment situation, the measures necessary to retain them for at least two years.12 The policy must form an integral part of the prevention program or action program under the Act respecting occupational health and safety [as of the effective date to be set by the government, which will be no later than October 6, 2025]. Harassment by third-parties [effective September 27, 2024]: Employers are expressly obliged to prevent psychological harassment “from any person.” This includes any third parties they do business with, such as customers, subcontractors and suppliers.13 The passage of time does not clean the slate [effective March 27, 2024]: An amnesty clause contained in a collective agreement will have no effect on disciplinary measures resulting from behaviours relating to physical or psychological violence within the meaning of the law.14 This major amendment is aligned with developments in case law on applying amnesty clauses in psychological harassment situations. Confidentiality of the psychological harassment complaint resolution process [effective September 27, 2024]: Where the parties to a settlement of a psychological harassment complaint do not wish to undertake to keep the agreement confidential, they must expressly agree in writing to waive the confidentiality obligation in the agreement.15 Punitive damages even in cases involving employment injury [effective March 27, 2024]: Where a worker’s psychological harassment complaint is upheld and they have suffered an employment injury resulting from the psychological harassment, they may also be entitled to punitive damages.16 The Administrative Labour Tribunal was previously prohibited from ordering an employer to pay punitive damages to a worker having suffered an employment injury resulting from psychological harassment.17 Expanded prohibition against reprisals [effective March 27, 2024]: In addition to the cases already provided for in the ALS, an employer may not take reprisals against a worker on the ground that the worker has made a report involving psychological harassment or cooperated in the processing of such a report or a complaint.18 Pratical considerations Given the many amendments introduced by Bill 42, all employers should keep abreast of new developments and best practices in preventing and handling harassment and violence in the workplace. In the short term, we recommend that employers: Hire experts to review and update their prevention of harassment and violence in the workplace policies before September 27, 2024. Depending on each situation, retain the services of a health professional who will play a proactive role and liaise with the employer in the handling of an employment injury claim. Explicitly define the terms of the mandate given to such expert in order to pinpoint what information is required to handle the employment injury claim. Schedule training sessions for all staff, including managers and executives. These training sessions should cover not only the aforementioned amendments, but also the procedure for reporting a sexual harassment or violence situation, filing and handling a complaint and making sure the process remains confidential. Inform members of their organization of the new definition and the updated company policy and establish response guidelines for managers who will have to deal with the various situations that can arise. Designate a person who will be in charge of enforcing and applying the harassment prevention and complaint processing policies. Carefully and meticulously document all aspects of inquiries conducted further to sexual violence or sexual harassment situations. Enlist the help of specialists in the field to help them identify and analyze the psychosocial risks and risks related to sexual violence that may affect workers in their establishment. Lastly, as regards handling employment injury claims, despite the fact that employers will no longer have to cover associated costs all on their own, employers may still need to handle claims or contest them in some situations, and they will have the burden of reversing the application of the presumptions benefiting workers. Limited access to medical records means more grey areas and more complex claims management. Given these significant changes, we believe it will be all the more important for employers to turn to qualified experts. When they do so, they should carefully set out the mandate that they wish to entrust to the expert in question to make sure that the opinion they obtain is detailed enough to adequately manage the employment injury claim. The terms of the mandate will need be drafted such that the expert understands whether the information requested is relevant for the employer to properly handle the claim. Our team is available to help you assess the impact that these many changes may have on your business. Statistics Canada, “Gender Results Framework: A new data table on workplace harassment,” released on February 12, 2024, online: The Daily — Gender Results Framework: New and updated data tables (statcan.gc.ca). This initiative was prompted by recommendation 138 of the report titled Rebâtir la confiance : Rapport du comité d’experts sur l'accompagnement des victimes d’agressions sexuelles et de violence conjugale [rebuilding trust: report from the committee of experts on support for victims of sexual assault and domestic violence], released in 2020. An Act to prevent and fight psychological harassment and sexual violence in the workplace, Bill42 (assented to on March 21, 2024), 1st Sess., 43rd Legis. (Qc) (hereinafter “B. 42”). The Bill’s provisions will gradually align with other legislative changes introduced by other recent bills, such as An Act to modernize the occupational health and safety system[3] and An Act respecting the regulation of work by children. Section 33, B. 42; section 1, Act respecting occupational health and safety (“AOHS”). Sections 35 and 36, B. 42; sections 59 and 61.2, AOHS. Section 5, B. 42; section 38, Act respecting industrial accidents and occupational diseases (“AIAOD”). Section 7, B. 42; section 39, AIAOD. Section 16, B. 42; section 458.1, AIAOD. Section 16, B. 42; section 271 and 272, AIAOD. Section 10, B. 42; section 271, AIAOD. Section 12, B. 42; section 327, AIAOD. Section 18, B. 42; section 81.19 Act respecting labour standards (“ALS”). Section 18, B. 42; section 81.19, ALS. Section 20, B. 42; section 97.1, ALS. Section 25, B. 42; section 123.17, ALS. Section 24, B. 42; section 123.15(4.1), ALS. s. 123.15(4) and 123.16, ALS. Section 21, B. 42; section 122(2.1), ALS.

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