Description

This week, releases have got Jill and Dana are all worked up. Typically presented at the end of all the nitty gritty details and negotiations of a workplace exit, releases have the power to induce panic for clients – but they are extremely important to understand. Our hosts break down the ins and outs off different types of releases, as well the consequences of signing them.

Full episode transcript below:

Intro: This podcast is produced by Nelligan Law.

Dana Du Perron: Welcome to All Worked Up, the podcast where two employment lawyers break down real-life workplace issues that affect real people. I’m Dana Du Perron –

Jill Lewis: I’m Jill Lewis, and we’re Senior Associates at Nelligan Law and we’re super excited to bring you this podcast aimed at making employment issues interesting, accessible for employees and employers.

Dana Du Perron: Welcome to All Worked Up. I’m Dana –

Jill Lewis: I’m Jill.

Dana Du Perron: Jill, what’s got you all worked up today because I know there’s something that’s got you riled up?

Jill Lewis: I came really worked up today. I like called Dana; I said I know exactly what we’re talking about today because I’m worked up about it. The release, a release.

Dana Du Perron: A release, right.

Jill Lewis: Signing a release, signing the sort of like end product of your deal. When you get down and you’ve – like you’ve spent all this time negotiating the deal, all the details, the nitty-gritty. And then you come down and you have to sign those final papers and there is going to be a release, full and final release and some clients will then get spooked.

Dana Du Perron: Yeah, Yeah. It’s often the last thing that we kind of talk about, right, and we –

Jill Lewis: And it shouldn’t be. We should say from the beginning and I’m going to start doing that more.

Dana Du Perron: Yeah, yeah.

Jill Lewis: Releases get me worked up.

Dana Du Perron: Yeah. No, it’s true because it’s like you hammer out all the nitty-gritty – when you’re talking about a deal, right, we’re talking about like usually when someone’s leaving their employment, right –

Jill Lewis: Yeah, yeah, yeah, yeah. How much you get paid …

Dana Du Perron: – like usually at the end of the employment relationship. Your employment’s been terminated, you’ve negotiated an exit, whatever and you’ve agreed OK, you’re going to get this much pay, you’re going to get this much towards your legal fees, you’re going to get, you know, a letter of reference, whatever. All those beautiful things –

Jill Lewis: All the little stuff you spent so much time, your lawyer is so [laughs] chuffed because this is another one off their docket –

Dana Du Perron: And here’s the release.

Jill Lewis: And then they send the document. You know when I think this comes up the most, whenever it’s like a bit of a problem is when there’s maybe not – it’s not a classic termination. Because when people come to see us, they’ve often – if they’ve been terminated, they’ve received the package and they have the release with them. So they’ve kind of glanced over it, they’ve read it. This is what I was thinking –

Dana Du Perron: And we talk about it. I usually go through it the first meeting too because I say – if someone’s not sure if they’re going to accept or not, I always want to say, “Let’s make sure we’ve gone over the release so if you leave and you sign, I know that you know what this says.”

Jill Lewis: Yes, yes. I think the problem sometimes comes up when someone comes to see us that hasn’t been terminated and we have then negotiated an exit for them and now they see the paperwork for the first time. So this is me, like I was driving and thinking about this, right, like when does this seem to come up, and it must be a shock for these individuals because they haven’t seen anything like this.

Dana Du Perron: Yeah.

Jill Lewis: It comes and it’s like sometimes the whole package is like 12 pages and it’s like super –

Dana Du Perron: Yeah, and it’s so legalese.

Jill Lewis: Could we be any more awful. I mean lawyers are the worst.

Dana Du Perron: Are we, are we [laughs]. We are.

Jill Lewis: They’re so long, right, it’s like run-on sentence I mean galore because it’s –

Dana Du Perron: Yeah, whereto for do you here, there, then the other thing, yeah, on behalf of numbered company 564, you and your executors and assigns and blah-blah-blah-blah.

Jill Lewis: I’m going to start planting little easter eggs in there to see if anyone’s actually reading this stuff to see if they find it. So yeah, so then they get it and then suddenly the big one’s – the confidentiality piece is the big one. So the release is – like essentially, it’s the document releasing the employer from any legal claim that you could have brought against them regarding – usually regarding the employment.

Dana Du Perron: Yeah. Often, they try to make it a little broad, right. They’ll say, “Any claim you have against us” whatever and –

Jill Lewis: “Before, present or in the future” –

Dana Du Perron: [Laughs] “You may have had, have or hereinafter shall have by virtue of anything related to anything.” And like OK, so I always flag this for people. Like if it’s not limited to issues related to their employment, I’m like, “Hey, this is overbroad.” And then most of the time they say, “I don’t have any other claims against my employer,” and that’s usually true.

Jill Lewis: Yeah.

Dana Du Perron: If it’s a big company and, you know, they make like all kinds of product, then you could have some product liability claim against them. Now I don’t know that that release would hold up down the road for something like that.

Jill Lewis: We’ve never seen it, yeah.

Dana Du Perron: I’ve never seen a situation where it’s arisen, where someone’s – but, you know, I –

Jill Lewis: Who says it can’t happen and –

Dana Du Perron: Still, you want to be alive to that.

Jill Lewis: Yeah, and it’s our tuche on the line if we [laughs] get you to sign and –

Dana Du Perron: Yeah, so that’s why you flag it. But you can decide, “Oh, I don’t think I have any other claims,” and then it lists out like including any benefits; non-salary benefits, any blah-blah-blah, right, like overtime pay, this, that. And honestly, I have seen people be like, “Oh my gosh, does this mean I have claims for these things that I haven’t even thought of” –

Jill Lewis: Yes, yes.

Dana Du Perron: – and you’re like, “They’re just trying to cover everything.”

Jill Lewis: Like literally everything; human rights, pay equity, any act and occupational health, WSIB sometimes is in there strangely.

Dana Du Perron: Yeah, yeah.

Jill Lewis: But it’s like anything and everything, especially disability stuff, right, because –

Dana Du Perron: Yeah. Yeah, because they don’t want to be on the hook for if you become disabled after you’ve signed that release, having to pay those disability amounts. But so that’s that first chunk, right, where you have no claims –

Jill Lewis: Yeah, and it takes about half of – it’s one sentence and it takes half a page, it’s ridiculous [laughs].

Dana Du Perron: Yeah. Yeah, exactly, it’s totally ridiculous but a necessary evil. There’s got to be a way we could tone that down. But seriously, we need like a case that just says, you know what, it’s fine –

Jill Lewis: It’s enough, enough, yeah [laughs].

Dana Du Perron: – if it says you have no claims, like –

Jill Lewis: Yeah [laughs]. Could it just say, can we do a yadda-yadda-yadda.

Dana Du Perron: Yeah. Yeah, exactly [laughs].

Jill Lewis: Can we just do, “I hereby release the employer and all other yadda-yadda-yadda from any claims” and just leave it –

Dana Du Perron: Yadda-yadda, yeah. Yeah.

Jill Lewis: Yeah, and just leave it at that.

Dana Du Perron: So much easier.

Jill Lewis: My gosh, OK. So that’s the big one and like usually clients aren’t super concerned about that one. But then you get into – OK, the big one is the confidentiality.

Dana Du Perron: Yeah.

Jill Lewis: That’s the one that’s definitely got me worked up right now. So confidentiality on a few different items. First, it’s going to be the minutes of settlement, the deal.

Dana Du Perron: Yeah, the actual terms of the deal.

Jill Lewis: The terms, like the details of the deal.

Dana Du Perron: Yeah. Why do they want you to keep that quiet?

Jill Lewis: They want you to keep that quiet or else they’re not going to ever settle again [laughs]. They want – OK, it’s like a fundamental term of contracts 101. If two parties are coming together on a deal, OK, and especially if there’s compromises given, somebody’s paying a little more or getting a little less, you want those details to stay private so that if down the road you need to negotiate another deal with another party – like I’m talking about employers and employees, right. If another employee comes and says, “Well I know what so and so got,” they’re now – they can use that as leverage to negotiate with the employer.

Dana Du Perron: Yeah.

Jill Lewis: So it takes away the employers negotiating power. It’s not necessarily like they’re all so evil and they want to just muzzle you and they don’t want you to like talk about – they’re not trying to and like they’re not trying to silence you.

Dana Du Perron: Yeah.

Jill Lewis: But if they allowed you to tell people the terms of your settlement, which is usually like the number of weeks that you received in severance, the benefit entitlement, the legal fees –

Dana Du Perron: If they paid your legal fees, yeah.

Jill Lewis: – did they pay your legal fees, right, it takes – it eliminates their bargaining power down the road if they want to negotiate with another employee.

Dana Du Perron: Right.

Jill Lewis: So if we start – if employers were to agree that this would just be like transparent then they’re not going to settle or their settlement are going to be garbage, they’re going to be really low, right –

Dana Du Perron: Yeah, yeah.

Jill Lewis: – because they’re setting themselves up for a precedent.

Dana Du Perron: Yeah, yeah.

Jill Lewis: So why would they let you share those details when they – then they’re setting themself up for a precedent, they’re going to have to pay the next person.

Dana Du Perron: Yeah, “We were really generous with you, we’re going to be really generous with everyone.”

Jill Lewis: Yeah.

Dana Du Perron: Maybe they will be anyway but you just –

Jill Lewis: Exactly.

Dana Du Perron: – want to be able to deal with each person on an individual basis.

Jill Lewis: Exactly.

Dana Du Perron: So I don’t have a problem with that element of a confidentiality – with that confidentiality element of a release.

Jill Lewis: Yeah, thank you.

Dana Du Perron: Usually there’s a carve-out so you can tell legal and financial advisors –

Jill Lewis: Yeah, yeah.

Dana Du Perron: – often immediate family –

Jill Lewis: Yeah.

Dana Du Perron: – and as required by law. So if the CRA were like, “Hmm, what was this,” like or if you’re called as like a witness in something and for some reason –

Jill Lewis: Yeah.

Dana Du Perron: – the terms of that settlement are relevant, and a court is saying, “You got to tell” –

Jill Lewis: You could talk about it, you got to talk about it.

Dana Du Perron: – you can tell and you’re not in breach. So that I usually don’t have a hard time with. I have more of a difficult time with it when it says – you know, when it’s got that language in there that says, “And if you breach this, you got to repay us.” I don’t like that clause. I like it when it’s just like kind of, you know, “If you breach it, well we’ll see what happens.”

Jill Lewis: It’s a fundamental term and it – yeah.

Dana Du Perron: Yeah.

Jill Lewis: Yeah, yeah, yeah, yeah. I mean I don’t know, is there a lot of case law on whether that’s actually enforceable if they –?

Dana Du Perron: I think there is because – and I haven’t seen any a lot, but there’s always the clauses that say –

Jill Lewis: Call Paul, where’s Paul.

Dana Du Perron: Yeah, [laughs] –

Jill Lewis: Patch Paul in really quick. Paul is Dana’s husband who is also an employment lawyer.

Dana Du Perron: Yeah, with –

Jill Lewis: A quick plug for [unintelligible 00:09:09] and he is a case law buff so –

Dana Du Perron: [Laughs] Yeah, yeah. He knows –

Jill Lewis: He’s a [dork? 00:09:17] [laughs].

Dana Du Perron: [Laughs] But I love him. Anyway, I do, he’s the best. I’m blushing. Anyway, all that to say there’s all those language about it’s not liquidated damage – or like, you know, it’s not a penalty, it’s liquidated damages that you’ve agreed is reasonable. So there is case law around those types of things.

Jill Lewis: Yeah, yeah.

Dana Du Perron: I can’t point you to case, but there is case law around those types of things. But, yeah, so that’s the limitation I have like no problem with.

Jill Lewis: Yeah, yeah.

Dana Du Perron: Sometimes there are broader confidentiality pieces that say like you cannot talk about what led to the termination of the relationship.

Jill Lewis: The allegations and things like that. That starts to get – yeah, that starts to get a little muzzily –

Dana Du Perron: I see why people have a hard time with that.

Jill Lewis: Yeah.

Dana Du Perron: You know, there’s been some talk about will those types of things be enforceable in the future when you talk about like, you know, victim’s rights and a lot of the societal changes that we’re seeing coming out of movements like the Me Too movement and Black Lives Matter and those kinds of things about people being able to share their experiences.

Jill Lewis: Exactly.

Dana Du Perron: Generally in those situations if you were to do it in a way that doesn’t identify or make it possible to identify the employer. Like, you know, if there’s –

Jill Lewis: Yeah, yeah. It’s tough.

Dana Du Perron: It is tough, it’s really tough and it would probably have to be – you know, you’d have to probably muddy some details or – like, you know, so it’s challenging.

Jill Lewis: Yeah, be really general.

Dana Du Perron: I don’t know how we get around that because again in those situations like the employer is kind of paying for the silence.

Jill Lewis: I mean I think that’s it, right. So you’ve got – and yeah, it does make me feel a little icky. Especially I’ve sat next to, you know, sexual harassment victims –

Dana Du Perron: Yeah, yeah.

Jill Lewis: – who are signing these, and they do feel, “OK wait, so like I can’t tell my story anymore,” right.

Dana Du Perron: Yeah, yeah.

Jill Lewis: And it is really difficult that – and I guess that is also part of your leverage though, that is sort of what you are bringing to the table is your story and they’re sort of buying it. So yes, I get that that can be really hard.

Dana Du Perron: Yeah.

Jill Lewis: That can be a really difficult piece.

Dana Du Perron: I don’t see that that often.

Jill Lewis: No, no and I don’t know – I think maybe there could be some space in the future for where you can like express your – being able to express your – I think –

Dana Du Perron: I think part of the reason that we don’t see that that often is because of the other clauses that they stick in those releases a lot of time, the non-disparagement.

Jill Lewis: Non-disparagement. Yeah, so you want to talk about that, non-disparagement?

Dana Du Perron: Yeah, because it’s like you have another section in the release that says you can’t say anything bad about the employer. And what I always tell people is like this is bigger than any other sort of legal obligation you otherwise have because like if I say something bad about you and it’s not true, you may have a claim against me for defamation.

Jill Lewis: Yeah.

Dana Du Perron: I’m not a defamation expert, that’s not what we do but like it’s a complete defence to a claim of defamation if something is true.

Jill Lewis: It’s true.

Dana Du Perron: Whereas non-disparagement is if it’s bad it doesn’t matter if it’s true, you can’t say it –

Jill Lewis: Yeah.

Dana Du Perron: – write it, whatever, post it on social media it usually says. So if you’ve got that clause and then still a relatively narrow confidentiality provision, that only applies to the term –

Jill Lewis: Yeah.

Dana Du Perron: – the terms of the deal, that clause, the non-disparagement may effectively silence you, like act to silence.

Jill Lewis: That’s the one I do have more problems with, like the non-disparagement, negative comments.

Dana Du Perron: Yeah.

Jill Lewis: Like it’s really specific, like you can’t say anything bad about the employer.

Dana Du Perron: Yeah.

Jill Lewis: And those I’ve found were fairly new, like in the last –

Dana Du Perron: I’m seeing it more and more, yeah.

Jill Lewis: – few years. Like now it’s just template, it’s in there. I think because of social media –

Dana Du Perron: Probably, yeah.

Jill Lewis: – I think it became real big.

Dana Du Perron: Yeah, yeah. And glass door and things like that and –

Jill Lewis: Yeah, exactly. Yeah. Yeah, and I do – yeah, you know what, that will be – I could see that one going in front of a judge.

Dana Du Perron: Yeah.

Jill Lewis: I could see a judge commenting on like an employer’s ability to restrict an employee.

Dana Du Perron: Sneak that into the release too as opposed to a term of settlement.

Jill Lewis: Yeah, that’s a good one too.

Dana Du Perron: Because you see it in terms – like I like to see it be mutual, right.

Jill Lewis: Yeah, absolutely.

Dana Du Perron: And I get it that like a company often – so for employees often if you’ve got an employer, they’re usually not going to want it to be the whole company because you can’t control – like if it’s a big company, Joe Blow doesn’t know about this – he doesn’t know that he can’t say anything bad about you and how are they going to stop him.

Jill Lewis: Yeah, yeah.

Dana Du Perron: So they like to usually limit it to like key people who might know about this or if there’s anyone in particular who you’re really concerned about.

Jill Lewis: Yeah.

Dana Du Perron: So that’s how you can make it work both ways but –

Jill Lewis: Yeah, both ways.

Dana Du Perron: So those are the things that you have to be prepared are probably going to be in there, right. You’re going to be releasing all the claims, there’s going to be confidentiality provisions whether narrow or broader. You can push back on some of – on, you know, some of these things.

Jill Lewis: Yeah, we can talk about – that can be a piece of the negotiations. And that is something that I have to remember when I am talking to a client and we’re talking about things that we’re going to go back on. I got to put that on the table and I’m going to – I’m just saying that out loud [laughs].

Dana Du Perron: As soon as I get the release, I do like to look at it and make sure am I good with this –

Jill Lewis: Yeah, I know but I mean –

Dana Du Perron: – and go over it, yeah.

Jill Lewis: – before that, right. Like when you’re just in the negotiations because that’s your time. Like when you get to the stage –

Dana Du Perron: Yeah, put everything on the table.

Jill Lewis: – where all the work has been done and you’ve got it and the employer is like less likely to start budging on stuff.

Dana Du Perron: Yeah.

Jill Lewis: But if you could raise it from the beginning, then everyone knows, everyone understands that this is going to be an issue.

Dana Du Perron: Yeah, yeah.

Jill Lewis: So I’m putting that out in the universe, I’m going to start making that a practice and –

Dana Du Perron: [Laughs] Manifest that, yeah.

Jill Lewis: – all of you can hold me accountable to it –

Dana Du Perron: Yeah, yeah.

Jill Lewis: – because it’s big and it can really smack you in the face when you see it at the end. So for anybody who wants to just go through any kind of litigation, it doesn’t matter what you’re doing –

Dana Du Perron: No, yeah.

Jill Lewis: – if there’s going to be a settlement –

Dana Du Perron: You’re going to sign something.

Jill Lewis: – you’re going to sign something.

Dana Du Perron: And we know – like so then the provisions we’re talking about are probably more employment-related. Some of the other like nitty-gritty, the leftovers kind of, they’re usually not admitting liability which often I have people be like, “What is this” –

Jill Lewis: “Why [unintelligible 00:14:52],” yeah.

Dana Du Perron: – but it’s like I mean they’re paying you, but you can’t say it’s admitting liability directly or indirectly but that’s going to be in there.

Jill Lewis: Yeah.

Dana Du Perron: It’s going to be saying something that you’re responsible for all unpaid income taxes, CPP, EI, any of those deductions –

Jill Lewis: Yes, yes.

Dana Du Perron: – which you would be responsible for anyway, but CRA can go after the employer –

Jill Lewis: They always –

Dana Du Perron: If there’s general damages, which are damages for like non-income loss but like, you know, if you’ve been discriminated against –

Jill Lewis: Discrimination, yeah.

Dana Du Perron: – or something, you know, the CRA could always look at those and say, “I don’t think that’s really what that’s for. I think it’s income and you should’ve paid tax,” in that case they can hold the employer liable, so the employer is saying, “No, you’re actually paying.” So they’re putting the risk on you. You know, it’s standard but people are always like, “The Income Tax Act.” But once you actually look at it it’s usually pretty standard. Usually you’re saying you’re signing it voluntarily without duress, you’ve had legal representation –

Jill Lewis: Legal representation …

Dana Du Perron: – or the change to get legal representation. You can’t sue anyone who could turn around and sue them.

Jill Lewis: Yeah. So like the indemnity clause?

Dana Du Perron: Yeah.

Jill Lewis: Yeah, yeah, yeah. Yeah, that’s another big one too. I can’t even really think of an example of when – if you wanted to sue an employ – if you wanted to sue a co-worker, the co-worker –

Dana Du Perron: Yeah. I mean they’ve usually covered those people off at the top of the release.

Jill Lewis: Yeah, that’s true.

Dana Du Perron: There’s no general claim against harassment as of right now, that could change.

Jill Lewis: Yeah.

Dana Du Perron: I always worry about it with insurers and stuff, like that the insurer is going to try to claim the benefit of the release or something so you want to be careful with those types of things. But that’s kind of it, those are the big points. Those are the things you should be aware going into any kind of settlement that there’s going to be a release at the end.

Jill Lewis: There’s going to be a release and there is – we do know that there is case law that if you talk, or if a family member talks, that you can have your whole settlement –

Dana Du Perron: Everything in excess of your minimum, your statutory minimum entitlements you would have to pay back.

Jill Lewis: OK, is this an actual case? I’ve been talking about it so much.

Dana Du Perron: You probably got this from me, and I don’t know where I got it but [laughs] …

Jill Lewis: Or is it just like – is just an old tale about –

Dana Du Perron: That’s becoming, yeah, an urban legend.

Jill Lewis: – yeah, about the daughter who posted on social media like, “Thank you employee XYZ for our summer vacation,” or something like that.

Dana Du Perron: OK. See, yeah, I had heard something –

Jill Lewis: Something –

Dana Du Perron: – yeah, like, “Dad beat the insurance company,” or something like that.

Jill Lewis: Yeah, yeah, yeah, yeah. Yes, something like that –

Dana Du Perron: But so there you go, we both have different versions. So don’t do it –

Jill Lewis: Yeah, especially – yeah, just don’t do it. Well OK, first off, don’t tell your teenagers anything.

Dana Du Perron: [Laughs] Yeah. Yeah, number one.

Jill Lewis: Like who’s the worst at keeping secrets –

Dana Du Perron: I learned that with my four-year-old, don’t tell because they will repeat everything.

Jill Lewis: I know, and they don’t need to know.

Dana Du Perron: Yeah.

Jill Lewis: So don’t tell your teenagers anything and anything that you tell an immediate family member –

Dana Du Perron: Yeah.

Jill Lewis: – they are also going to be bound by confidentiality. You can’t get around it –

Dana Du Perron: Yeah, or you’re treated as if you broke – you breached if they –

Jill Lewis: Exactly, yeah.

Dana Du Perron: – if they breach.

Jill Lewis: Yeah, or I’ll have people that say – I’ll read it and say, “OK and you can only tell the people – you can only disclose the minutes of settlement to your immediate family, financial and legal,” and they’re like, “Yeah, once I sign this though, right” –

Dana Du Perron: Yeah [laughs].

Jill Lewis: – and I’m like, “Sorry, what’s that,” “No, like once I sign it. I mean right now I’m OK,” and I’m like who have you been telling.

Dana Du Perron: Yeah, yeah.

Jill Lewis: What does that tell me –

Dana Du Perron: Yeah. I mean technically that’s true because –

Jill Lewis: Sure.

Dana Du Perron: – you’ve not agreed to anything yet.

Jill Lewis: Sure.

Dana Du Perron: But if they find out and I mean you’re going to have to prove it after the fact and just –

Jill Lewis: My god, I know.

Dana Du Perron: – it’s better to keep this stuff confidential while you’re having those discussions.

Jill Lewis: Yeah, and that should just I guess be something I say to people. I mean look, I love to chat with my friends, I obviously like to talk, we have a podcast [laughs]. So if I was having employment issues, I’d probably talk to a couple of friends about it.

Dana Du Perron: Not anymore you wouldn’t [laughs].

Jill Lewis: Not anymore I wouldn’t, but –

Dana Du Perron: Not since we had this conversation.

Jill Lewis: – well yeah, like I guess – so I guess I should even say there’s another thing I’m going to hold myself accountable to [laughs] is in my initial intakes to stop talking. No, just be cautious about who you are talking to because it down the road –

Dana Du Perron: Yeah.

Jill Lewis: – could make settlement difficult.

Dana Du Perron: Should we save this episode for like January 1, and it can be Jill’s New Year’s resolutions [laughs].

Jill Lewis: [Laughs] These are all the things I’m going to – yeah. I mean look, this is a great exercise.

Dana Du Perron: Yeah, [laughs], it’s all about growth.

Jill Lewis: It is all about growth, things we’re learning.

Dana Du Perron: Yeah. But so those are things, those are the big – those are releases –

Jill Lewis: Releases …

Dana Du Perron: – for the most part.

Jill Lewis: Yes.

Dana Du Perron: Right, what you need to think about –

Jill Lewis: Yeah.

Dana Du Perron: – and be prepared for them.

Jill Lewis: Yeah, because you’re going to have to sign it.

Dana Du Perron: Yeah.

Jill Lewis: All right, I feel better now.

Dana Du Perron: You got that off your chest [laughs]?

Jill Lewis: I got it off [laughs] …

Dana Du Perron: Yeah.

Jill Lewis: All right, OK.

Dana Du Perron: Yeah, talk to you next time.

Jill Lewis: OK, bye-bye [laughs].

[End of recorded material 00:19:26]

This content is not intended to provide legal advice or opinion as neither can be given without reference to specific events and situations. © 2021 Nelligan O’Brien Payne LLP.

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