According to Florida’s Third District Court of Appeal the answer is “Yes.”
College student Dana Snay wrote, “Mama and Papa Snay won the case against Gulliver. Gulliver is now officially paying for my vacation to Europe this summer. SUCK IT.” Click here to read an article from the Miami Herald.
Just to clarify, Dana’s father did not “win” his age discrimination case. He “settled” with the private prep school where he had been headmaster until his contract was not renewed. The problem for Mr. Snay arose from a non-disclosure provision in the settlement agreement.
Mr. Snay was precluded by the agreement from disclosing even the existence of the settlement to anyone other than his wife, attorneys and accountants. When he disclosed to his daughter (who posted the settlement to 1,200 friends on Facebook), the District Court ruled that he breached the non-disclosure clause, resulting in the prep school not having to pay a portion of the agreed amount.
One of the hallmarks of mediation is confidentiality, and the mediation community has been abuzz with the news of $80,000 lost because of a Facebook post. It is important to note the difference in the confidentiality of mediation and the confidentiality of settlement agreements.
The Florida Legislature passed the Mediation Confidentiality and Privilege Act, knowing that parties are much more likely to get their disputes settled if they can talk freely about the dispute without fear that something they say will get repeated outside of the mediation. Under the Act, mediation discussions are prevented from disclosure, not only in court but anywhere outside of the mediation.
That makes the confidentiality broader than the common law privilege which only prevents the use of settlement discussions in court. But, the Act specifically exempts several categories of discussion from confidentiality including child and elder abuse, fraud, a criminal act and even legal malpractice committed in the mediation. The confidentiality continues after the mediation, regardless of whether the case settles.
A settlement agreement is confidential only if the parties agree in the contract to make it confidential. The Mediation Confidentiality Act makes clear that the settlement agreement signed by the parties is not part of mediation confidentiality.
In the Facebook post case, the court noted that a settlement agreement is just a contract and will be construed like any other contract. Since the father agreed not to disclose even the existence of a settlement, his disclosure to his daughter was a breach of the agreement. It is much more common for settlement confidentiality clauses to prevent disclosure of the terms of settlement while allowing the fact of settlement to be disclosed. Of course, he would not likely have been found out if she hadn’t posted the case to Facebook.
What can we learn from this?n the past, confidentiality clauses were often used in cases where neither party had much reason to be concerned about whether the settlement was disclosed. In more recent years, more sophisticated attorneys have limited the use of the clauses because of the lack of need, the difficulty of policing disclosures and the fact that the settlement is often designed to terminate litigation and the relationship between the parties, not prolong it with an enforcement action.
In cases where one or both parties have a legitimate need for confidentiality, the parties should be careful in drafting so that the provision:
- Is limited to the purposes for which it is needed;
- Allows disclosure to attorneys, accountants and others with a need to know;
- Requires any disclosure to be conditioned on an agreement not to disclose further;
- Has an end date if appropriate; and
- States clearly the penalty/damages for disclosure.
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