A recent court case in Florida that involved an age discrimination claim, an out of court settlement and a teenager’s ill-advised Facebook post was a powerful reminder that confidentiality clauses in employment- related lawsuits must be honored.
Settlements in employment-related lawsuits commonly include a confidentiality clause. Although some may mistakenly consider these clauses mere boilerplate, the Florida Court of Appeals recently ruled that a plaintiff forfeited a $150,000 settlement by violating the confidentiality clause in his settlement agreement with his former employer.
As the Miami Herald reported, Patrick Snay was the former headmaster of Gulliver Preparatory School. When his contract was not renewed at age 69, he sued the school claiming age discrimination and retaliation. The case was settled at a mediation, and the settlement included a provision that required Snay and his wife to keep the “terms and existence” of the agreement confidential.
Snay nevertheless told his daughter – a recent graduate of the same school – that he had settled on favorable terms. Snay’s daughter, in turn, went on Facebook to announce “Mama and Papa Snay won the case against Gulliver. Gulliver is now officially paying for my vacation to Europe this summer. SUCK IT.”
Since Ms. Snay’s 1,200 Facebook friends included current and former Gulliver students, word of the disclosure quickly came to the attention of school officials. They notified Snay that he had breached the confidentiality agreement and that as a result the school would not make the settlement payments.
Snay won a ruling from the trial court to enforce the settlement, but the Florida Court of Appeals reversed that decision and held that the school did not have to make any payment to him. “Snay violated the agreement by doing exactly what he had promised not to do,” the Court held. “His daughter then did precisely what the confidentiality agreement was designed to prevent.”
While in this instance it was a former employee who learned the danger of “loose lips,” it is just as important for employers to understand the importance of these clauses and strictly comply with them.
Often, when an employment-related lawsuit is settled, the parties are focused on the major financial terms, such as the payments to be made, or obtaining dismissal of the lawsuit. But as Mr. Snay’s case highlights, the courts treat settlement agreements like any other contract, and will enforce all of the terms of the agreement. The case highlights for employers the importance of strict compliance with all terms of settlement agreements.
If you have any questions about employment separation agreements or confidentiality clauses, please contact Dean Pacific (email@example.com
or 616.752.2424), or any member of Warner’s Labor Practice Group.