Social Media these days is like the Wild West. Most of the rules, and the consequences for breaking rules, are just not clear yet. Lawyers and business owners are still trying to keep up with this quick moving world. Still, reckless posting and online boasting can result in big problems for you and those close to you. Sometimes a little good sense can go a long way. So, here is Rule #1: If you or someone close to you is a party to a confidentiality or settlement agreement, then don’t talk about the agreement or its terms. Just don’t do it. And definitely don’t post, or boast about it online.
Patrick Snay was the Headmaster at the Gulliver Preparatory School in Miami, Florida. He entered into an $80,000 settlement as a result of an age discrimination and retaliation suit he filed against the School. As part of the settlement, the School also agreed to pay Snay $10,000 in back pay, and $60,000 in attorneys’ fees. The settlement agreement included a fairly standard confidentiality provision, that provided in relevant part, as follows:
[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.
The Snays later admitted that because their daughter Dana was involved with the case and the School (they alleged she had been retaliated against), they agreed to tell her only that the case was settled and they were happy with the result.
Dana wasted no time boasting about the settlement to her 1,200 Facebook friends (many of which were Gulliver students), stating “Mama and Papa Snay won the case against Gulliver. Gulliver is now officially paying for my vacation to Europe this summer. SUCK IT.”
The “boast post” spread faster than light travels, and made its way back to School officials in no time. The School then took the position that because Snay had violated the confidentiality agreement by disclosing its existence to his daughter, it would not render the $80,000 portion of the settlement to Snay. Snay then filed a motion to enforce the settlement. A hearing was held where the parties agreed to rely on their deposition testimony, to determine if Snay’s daughter had knowledge of the settlement, and, if her post had violated the Agreement. Initially, Snay prevailed when the trial court agreed with Snay and granted the motion. The School appealed.
Last month, on February 26, 2014, the Third District Court of Appeals for the State of Florida agreed with the School, that Snay had in fact violated the confidentiality agreement, and reversed the Circuit Court ruling. Not a good day at the Snays.
Generally, confidentiality agreements and confidentiality provisions in settlement agreements provide, as a matter of course, that the parties should not, directly or indirectly disclose confidential information, or settlement terms to any outside parties, other than those with a bona fide need to know (for example, attorneys or accountants). “Directly” means that the party should not directly disclose the information, and “indirectly” means that the party should not permit the information to be disclosed by a third party.
The District Court of Appeals found that Snay did violate the agreement, by doing exactly what he had promised not to do (disclosing the existence of the settlement agreement to his daughter, someone other than his attorneys, professional advisors, or spouse), and that his daughter then did precisely what the confidentiality agreement was designed to prevent – advertising to the Gulliver community that Snay had been successful in his age discrimination and retaliation case against the School.
Not the easiest situation for the Snays, considering the circumstances. They told their daughter only that the case was settled and they were happy with the result, but the Court read the confidentiality provision literally, and found that Dana was not a party who was permitted to know of the existence or the terms of the settlement, and therefore, the disclosure to her was a violation of the confidentiality covenant, and, Dana’s posting about the settlement thereafter, led to the exact opposite of what a confidentiality provision is supposed to do – which is prevent public disclosure of confidential information.
Whether the Snays appeal or not, the real takeaway here, is that in this “New Age” world of Social Media, we all need to take a step back and “think” before we post. And, if we are “directly or indirectly” subject to a promise of confidentiality, we must take it seriously and honor our promise, or pay the price.
– Lisa R. Aljian, Esq.