Social media in general, and Facebook in particular, seems to have become so ingrained in modern existence that while it is potentially laughable, it is nonetheless true that we can seriously live by the tenet “If it’s not on Facebook, it did not happen.” But when it comes to confidential settlement agreements, there is no room for social media oversharing. Before many employers will even think about settling with a current or former employee, they will insist upon the employee maintaining complete confidentiality over the settlement. However, reluctant employers will often wonder whether these confidentiality provisions are even enforceable. A recent decision from a Florida court says, “Yes.”
The case involved the $80,000 settlement of a private school’s former headmaster’s lawsuit alleging age discrimination. Four days after the parties signed the settlement agreement, the headmaster’s daughter published a Facebook post stating, among other things, that her father had won his age discrimination case against the school, that the settlement would fund a vacation to Europe, and that the school should “suck it.” After learning of this post, the school refused to pay the settlement funds, claiming that the headmaster violated the settlement agreement’s confidentiality provision, which read:
“13. Confidentiality…[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 [sic] portion of the settlement Payments.”
While the lower level court concluded that neither the headmaster’s disclosure of the agreement to his daughter nor the daughter’s Facebook posting breached the confidentiality provision, the Florida appellate court disagreed. It found an unmistakable breach of confidentiality, by his own admission, the headmaster had told his daughter, who was not identified in the agreement, about the settlement. She then broadcast its existence to 1,200 Facebook friends, many of whom were either current or former students of the school. Based on the language of the confidentiality provision, the appeals court concluded the headmaster could not disclose any information about either the existence or the terms of the settlement to anyone other than those expressly named in the provision. It further found that violation of the confidentiality provision meant the school was not obligated to pay the headmaster, since his entitlement to settlement proceeds depended on his compliance with this provision.
Employers would be well-advised to review any confidentiality provisions included in their standard separation and settlement agreements to make sure the terms have teeth. Employers should consider conditioning severance or settlement payments on compliance with the applicable confidentiality provision and policing a former employee’s compliance with the terms of the agreement, perhaps through periodic Google searches. These revisions could be worthwhile to both manage the employer’s exposure to the consequences of potential breaches, as well as to prevent unnecessary payments of settlement funds where a breach has occurred.