We all understand the importance of including a confidentiality clause in settlement, severance, and separation agreements. While nothing can prevent a departing employee from going on a conspicuous shopping spree or driving around town in a flashy new car with his/her settlement dollars or severance payment, employers want to avoid a situation where a former employee openly discloses the amount of a settlement or severance payment and encourages legal challenges by other employees who may have different circumstances than the employee receiving the payment and/or causing discord among current employees who feel cheated by the departing employee receiving a payment they do not believe the employee deserved. A recent Facebook mistake by the daughter of a plaintiff who settled a lawsuit with his former employer highlights the need for well drafted confidentiality clauses. In a story making news beyond just the human resources and legal circles, Dana Snay’s Facebook post cost her father his $80,000 settlement.
Patrick Snay sued his former employer, Gulliver Prepatory School in Miami, for failing to renew his contract. He alleged age discrimination and retaliation. The case resolved confidentially for $60,000 in attorney’s fees, $10,000 in back pay, and $80,000 in non-wage damages. The payments were subject to a confidentiality clause with a tender-back provision for the $80,000 payment. The confidentiality clause prohibited Snay from discussing the case or the settlement with anyone but his attorneys and spouse. Snay told his daughter about the settlement allegedly because she had suffered psychological scars from the incident and needed to be told something about its resolution. This breach of the confidentiality clause on its own probably never would have become known. Snay’s college-age daughter, however, could not resist bragging about the settlement 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.” As is true of many ill-advised Facebook posts, Dana Snay forgot that current and former Gulliver students were among her 1,200 friends. News traveled back to the school’s lawyers who challenged the settlement just four days after the deal was executed, refusing to make the $80,000 payment. A Florida appeals court ruled in favor of Gulliver Preparatory. “His daughter  did precisely what the confidentiality agreement was designed to prevent, advertising to the Gulliver community that Snay had been successful in his age discrimination and retaliation case against the school,” the court’s opinion said. Snay has an option to appeal to the Florida Supreme Court.
My guess is that Ms. Snay is no longer going to Europe and has learned a valuable lesson about Facebook posts that will serve her well in her first job after college. But employers can learn something from this incident too. If an employer wants to prevent disclosure of the existence or amount of a settlement or severance payment, a well written confidentiality clause is essential. These clauses can permit disclosure to immediate family members (the Snay/Gulliver confidentiality clause did not) but subject those family members to the same confidentiality requirements as the employee, preventing disclosure outside the immediate family.