Facebook Ruined His Settlement—Confidentiality Clauses in the Age of Social Media

If you reach a legal settlement with another party, it often contains a confidentiality clause.  The language can vary, but, generally you are not allowed to disclose the existence of the settlement or the amount paid.  Many people can’t help but to tell their family and close friends that they reached a settlement.  Although this is a technical violation of most confidentiality clauses, companies rarely enforced the provisions because the information was not shared publicly.  Consequently, the reputation of the company was not publicly harmed.  However, with the advent of social media, confidential information can reach a large number of people in a very public format.  Consequently, companies are enforcing confidentiality provisions if the other side shares of the information on Facebook or another public space.

Case in point…

facebook ruined a court caseConsider the case of Gulliver Schools v. Snay.  The former headmaster of a school in Florida sued his employer for age discrimination and retaliation when the school did not renew his contract.  Snay settled his case for $10,000 in backpay, an additional $80,000 payment, and $60,000 in attorney’s fees.   The settlement agreement included a detailed confidentiality provision which stated that Snay would not share the existence or amount of the settlement agreement with anyone other than his spouse.  Violation of this clause would require him to pay back the settlement funds.

Unfortunately, Mr. and Mrs. Snay told their daughter that they had reached a settlement.  She then posted the following on Facebook.  “Mama and Papa Snay won the case against Gulliver.  Gulliver is now officially paying for my vacation to Europe this summer.  SUCK IT.”  The post went out to 1200 of the daughter’s closest “friends,” many of whom were current or past Gulliver students.

The school immediately notified Snay that he had breached the agreement because of his daughter’s Facebook post.  Snay filed a motion to enforce the settlement and the trial court agreed.  However, the appellate court held that Snay had violated the confidentiality provision.  Moreover, he had done what the confidentiality clause was supposed to protect against—informing the school community about the settlement.  Consequently, Mr. Snay was required to return the $80,000 to Gulliver.

The Hard Lessons.

The lesson here is that if you reach a legal settlement with another party, it is important to consider the confidentiality clause.  In order to protect your ability to tell your family and friends about the settlement, you may wish to request that the confidentiality provision only refer to public disclosure.  Thus, you are only prohibited from discussing the settlement with the press or on social media.  This would have avoided the problem faced by Mr. Snay.  Regardless, it is always a bad idea to share any information about a settlement on Facebook or other public space!

Facebook Ruined His Settlement—Confidentiality Clauses in the Age of Social Media by

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