Word to the Wise – Confidentiality Clauses in Settlement Agreements WILL Be Enforced!

Word to the Wise – Confidentiality Clauses in Settlement Agreements WILL Be Enforced! PDF

Attention parents! When warning your kids not to expose private information on Facebook or other social media, remember that the same guidelines apply to YOU in many different contexts. As in, when you promise to keep something confidential, you had better do so, or pay the consequences – at least according to the District Court of Appeal of Florida in an opinion filed on February 26, 2014 in Gulliver Schools, Inc., etc., et al. v. Patrick Snay (Case No. 3D13-1952).

Patrick Snay reached a settlement of an employment discrimination lawsuit against his former employer, and the settlement agreement contained a detailed confidentiality provision, which read in part as follows:

13. Confidentiality. . . [T]he plaintiff shall not either directly or indirectly, disclose, discuss or communicate to any entity or person, except his attorneys or other professional advisors or spouse any information whatsoever regarding the existence or terms of this Agreement . . . A breach . . . will result in disgorgement of the Plaintiffs portion of the settlement Payments.

Almost immediately after signing the agreement, Mr. Snay and his wife told their daughter about the settlement. The [choose your adjective] child then posted the following on Facebook, to all 1,200 of her friends:

Mama and Papa Snay won the case against Gulliver. Gulliver is now officially paying for my vacation to Europe this summer. SUCK IT.

The Florida Court of Appeal held that Dad’s testimony that “[m]y conversation with my daughter was that it was settled and we were happy with the results” established a breach of the confidentiality provision. This cost him his $80,000 settlement, though his lawyers got to keep their $60,000 portion of the settlement.

Moral of the story – When you promise to keep a secret, keep the secret! Otherwise, change the terms of your promise.

You can read the Court’s opinion here: GULLIVER SCHOOLS, INC. v. SNAY, Fla: Dist. Court of Appeals, 3rd Dist. 2014

Posted in Mediation.