A recent case in the United States showed the importance of maintaining the confidentiality of legal settlements. The case involved Patrick Snay, a long-time headmaster of Gulliver Preparatory School in Florida. In 2010 the school refused to renew his contract of employment. Snay sued the school, alleging age discrimination.

The claim reached mediation in November 2011 and settled during negotiations. The school agreed to pay $10,000 in unpaid wages, $80,000 in damages, and $60,000 in costs.

Confidentiality clause

The settlement was formalised in a deed, which included a confidentiality clause. Deeds with clauses of this kind are, as in the United States, usual practice in the settlement of claims in Australia.  This clause required Snay and his wife to keep the “terms and existence” of the agreement confidential.

Snay told his daughter, Dana, about the settlement. If it had ended there, it is unlikely that the settlement would have been jeopardised, as although there had been a breach of the obligation, the school had suffered no damage from the breach.

However, Dana quickly took to Facebook, where she posted the following status update:

“Mama and Papa Snay won the case against Gulliver. Gulliver is now officially paying for my vacation to Europe this summer. SUCK IT.”

Amongst her audience of 1,200 Facebook friends were current and former students of the school. News of the post soon reached the school’s lawyers. Within four days a letter had been written to Snay telling him that payment would not be made because he had breached the confidentiality clause.

Snay won an initial action to enforce the settlement, but the school appealed and won. Judge Linda Ann Wells wrote in her judgement that “Snay violated the agreement by doing exactly what he had promised not to do.” She continued. “His daughter then did precisely what the confidentiality agreement was designed to prevent.”

Confidentiality clauses exist to make early settlement more attractive to the parties. Employers are often, understandably, keen to keep the existence of settlements confidential so as to not encourage similar claims.  Dana was wrong to claim that her father had “won” his case against the school. Instead, the parties had agreed that it was in their interests to discontinue formal legal proceedings, enter an agreement, and go their separate ways. The school entered the agreement on the basis that it be kept confidential, and Snay breached that condition.

Although they are standard, the exact terms of confidentiality clauses vary. Whether or not such a clause has been breached will depend on its precise form of the clause and the circumstances of the case. However, revealing information on Facebook will almost certainly breach confidentiality. In an age when our thoughts can be instantly broadcast to the world, constant vigilance is vital, especially when we are bound by obligations of confidence.  The best advice is always to carefully abide the terms of any deed, and generally to tell as few people as possible about the outcome of settled legal proceedings.