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Why Breaching a Confidentiality Clause Can Suck

Thursday, 3 April 2014

Acrimonious litigation often provides the victor with a great sense of satisfaction but the temptation to gloat can be fateful. If pride comes before a fall then rubbing your adversary’s nose in it might spell disaster if what goes around comes around.

Putting karma to the test, a Florida teenager has cost her parents dear by taking to Facebook to celebrate her father’s success in his age discrimination compensation ‘win’ over his former employer.

The teenager’s boast breached a confidentiality clause voiding the $80,000 settlement.

A Headmaster’s Most Expensive Lesson

Patrick Snay, 69, was employed by Gulliver Preparatory School in Miami as its headmaster. In 2010 the school refused to renew his contract and he brought a claim for age discrimination against the school and also claimed that the school had retaliated against his daughter who was a student there.

The claim did not reach its conclusion through the court process but, as is the case in many civil claims, it was settled by an agreement reached between the parties. The settlement included $10,000 in back payments related to wages, $80,000 as a settlement and $60,000 to pay his legal fees. The terms of the settlement were subject to a confidentiality agreement.

Following the settlement Dana Snay, the daughter of Patrick Snay, decided to inform her 1,200 Facebook friends of her father’s victory bragging: “Mama and papa Snay won the case against Gulliver,” and, “Gulliver is now officially paying for my vacation to Europe this summer. SUCK IT.”

Within four days of the settlement being concluded the school’s lawyers informed Mr Snay that they would not be paying the compensation that had been agreed. Subsequently Mr Snay secured a court order to enforce the agreement but Florida’s Third District Court of Appeals overturned that decision. The case may be further appealed to Florida’s Supreme Court.

Comment

The vast majority of civil claims that are issued in the UK never make it to the trial stage whereby the case is heard by the court and the court decides the terms of any settlement. That means most claims are settled out of court by a private agreement, the terms of which both parties must comply with in order for it to be effective.

The English courts will normally uphold confidentiality agreements unless it is in the interest of justice not to do so. This is a relatively high bar which requires for example a public interest in waiving confidentiality or that there has been some form of fraud or duress.

This case, although from the US, clearly demonstrates the risks of passing any information about a confidential settlement to anyone not party to the agreement. It should also serve as a warning to parents that teenagers are not always the most discreet of confidants!

For specialist advice contact Peter Gourri today by email PGourri@rollingsons.co.uk or telephone 0207 611 4848.

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