Most settlement agreements in employment cases contain confidentiality clauses. The reasons for this are many, but generally employers do not wish to have others learn of the details of a settlement. Whether it is a fear of negative media coverage, a concern that the implications of settling may have on other similar cases, or just a desire not to encourage other employees to file similar lawsuits, most employers insist that the details of settlements remain between the parties and only the parties. Most of the time, this isn’t a problem. But that is not always the case.
A friend recently directed me to the following article that provides a very poignant reminder about the importance of keeping the details of a confidential settlement as private as possible:
According to the article, Patrick Snay agreed to settle his age discrimination case against Gulliver Preparatory School in Miami, Florida for $80,000.00. The subsequent settlement agreement contained a standard confidentiality clause that prohibited the parties from disclosing the details of the settlement. This, however, did not occur. Mr. Snay disclosed the details of his settlement to his daughter Dana, a college student at Boston College. Dana, in turn, took to Facebook, posting: “Mama and Papa Snay won the case against Gulliver” and “Gulliver is now officially paying for my vacation to Europe this summer. SUCK IT.”
Apparently it did not take long for Dana’s public disclosure of the settlement terms to get back to Gulliver Preparatory School and its attorneys because several of Dana’s 1,200 Facebook friends were current and former students at the school. The School sued Mr. Snay for breaching the confidentiality agreement and was successful in having the agreement rescinded, which unless appealed means that Mr. Snay will be required to pay back the entire $80,000.00 settlement he received.
This situation provides two important reminders with respect to confidentiality clauses. First, the fewer people you talk to about your settlement, the better. Outside of your attorney, spouse, and tax advisor, there generally is no reason to disclose the terms of an agreement to anyone else. Second, do not underestimate the power of social media. Ten years ago, the chances of this situation occurring would have been slim. Dana may have bragged to a few people and it likely would have gone no further. However, thanks to Facebook, she bragged to 1,200 people simultaneously and it went further. A lot further. $80,000.00 further to be precise.