March 13, 2014
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In virtually every settlement of any complaint, lawsuit or proceeding, the employer always requests a confidentiality provision. The clause generally requires that employees keep the fact of and terms of the settlement confidential. The clause will usually only allow the employees to advise their spouse, immediate family and/or their financial advisors of the settlement on the condition that those individuals keep the terms confidential.

Unfortunately, social media and maintaining confidentiality don't tend to go hand in hand. Recently, an American Court of Appeal in Florida tossed out an $80,000 discrimination settlement between a preparatory school and its former headmaster, ruling the ex-employee breached the terms of a confidential agreement when the daughter posted on Facebook to brag about the settlement.

Days after the settlement the Daughter posted to her 1,200 Facebook 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 post was seen by many current and former students. It ultimately made its way back to the school's lawyers, who took the position that the post violated the confidentiality clause. As a result, four days after signing the deal, the school's lawyers notified the former headmaster that the school wouldn't pay the settlement. The employer moved to declare the settlement void. At first instance, the employee won a ruling to enforce the settlement. The school then appealed and won. On appeal, the Court found that headmaster had violated the agreement by doing exactly what he had promised not to do (disclose its existence), and that the post did precisely what the confidentiality agreement was designed to prevent (its broadcast).

On its own, the former headmaster confiding in his daughter would not likely have jeopardized the settlement. However, the daughter's announcement of the settlement [the vacation comment was apparently a joke] to current and former students of the school through Facebook was a clear violation of the confidentiality clause.

The case is a cautionary tale. While there is a normal desire on the part of employees to advise their family members and friends of any settlement (particularly after a lengthy legal battle), it's critical that employees understand their obligations as they pertain to confidentiality before speaking to anyone, and ensure those obligations are respected. If the settlement allows the employee to tell their family members of the settlement, the employee needs to make sure that the family members in turn understand that the settlement must be kept confidential. Finally, it's always a good rule of thumb to never post anything that is confidential on social media. If in doubt, speak to your counsel before posting anything.

This content is not intended to provide legal advice or opinion as neither can be given without reference to specific events and situations. © 2017 Nelligan O’Brien Payne LLP.

Service: Employment Law