Tuesday, March 4, 2014

Loose Lips Sink Former Employee’s Ship

Confidentiality clauses are a standard provision in most agreements settling an employment dispute. Last week, a former preparatory school administrator learned the hard way that these provisions matter to employers and that violating a confidentiality clause can be costly.

An appeals court in Florida ruled last week that a Facebook post made by the former school administrator’s daughter violated the confidentiality clause in his settlement agreement with his old employer. As a result, the former administrator forfeited $80,000 of his settlement. 

The former administrator had filed an age discrimination complaint against the school that used to employ him, and he had confidentially settled that claim. After the settlement, however, the former employee’s daughter swiftly posted on Facebook that her parents had won the case, that the school was “now officially paying for [her] vacation to Europe this summer,” and that the school could “SUCK IT.” The post went to the daughter’s 1200 Facebook friends, including many past and present students of the school where her father had worked. In response to the post, the school declined to pay the former school administrator his settlement money, and the administrator sued in an effort to enforce the settlement. 

The court sided with the school. In ruling that the settlement was unenforceable due to the confidentiality breach, the court noted that the confidentiality provision prohibited the former school administrator from “directly or indirectly” disclosing the settlement. The court noted that the administrator admittedly told his daughter about the settlement and the daughter then “did precisely what the confidentiality agreement was designed to prevent, advertising . . . that [the former employee] had been successful in his age discrimination and retaliation case against the school.”

This case is a reminder that confidentiality clauses matter greatly to employers and that news conveyed electronically travels fast, far, and wide. Confidentiality matters to employers, because reputations matter. In addition, employers are often concerned that publicity may trigger other potential claims or create an expectation of future settlements. Employers can take heart, however,  that courts take settlement confidentiality obligations seriously and will enforce them.

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