When considering whether to settle a lawsuit filed by a current or former employee, many of my employer clients have serious doubts about the usefulness of a confidentiality provision. For good reason, employers don’t want the plaintiff to brag about the settlement, thereby encouraging other potential litigants. But, my clients often ask, will the employee really be silenced? Or will the employee just ignore his confidentiality obligation.
My answer has a few parts. First, having a confidentiality provision is better than not having one. Second, if the employer learns of a breach, it will, at least, have some options for holding the employee accountable. A story from last week’s news headlines confirms the validity of both points.
Teenager Dana Snay’s father settled an age-discrimination case brought against his former employer, Gulliver Preparatory School, for $80,000. When the girl learned about the settlement, she did what most teenagers would do—she posted about it on Facebook, broadcasting the news 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.
Snay was just kidding about her European vacation—there was no such vacation in the works. But that’s probably not what bothered Gulliver. When it learned about the post, it refused to tender the settlement payment to Snay’s father, claiming that the post constituted a breach of the confidentiality provision in the settlement agreement.
And a Florida appellate court agrees. The Miami Herald reports that the court found in favor of the employer when Snay’s father sought to compel payment.
So what are the lessons to be learned, dear readers?
First, don’t underestimate the value of a confidentiality provision.
Second, understand your contractual obligations and abide by them strictly. Although many commentators are blaming Snay for her Facebook chattiness, the real fault lies with her father. He promised that he would keep the agreement confidential and he failed to keep his promise. There are consequences to such failures, which is why we spell them out in written contracts.