More often than not, confidentiality agreements accompany legal settlements these days. There are often consequences if the parties to the settlement reveal the details of a business dispute settlement. For example, the former headmaster of a south Florida preparatory school recently lost the settlement he negotiated with his former employer due to a Facebook post.
The Florida man sued his former employer for age discrimination when the school refused to renew his contract in 2010. He and the school settled the case for $90,000 in damages and back pay and $60,000 in legal fees. The details of the settlement were to remain confidential. However, the former headmaster revealed the details of the settlement to his daughter, who made post on her Facebook page about them.
It did not take long for the school to discover the post. The school promptly refused to pay $80,000 it still owed the man under the agreement. According to the school, he breached the agreement by sharing the settlement with his daughter, so it was no longer obligated to perform their part of the deal.
The trial court disagreed, but the Florida Court of Appeals ruled that the agreement was breached, so the school did not have to perform under the agreement. According to the ruling, the contract was not clear as to whether telling his daughter about the settlement was a breach. However, it seems obvious that he should have cautioned her not to post it on Facebook.
A privacy concerns of any entity regarding the details of any resolution of a business dispute are valid. Just because a business agrees to settle does not necessarily mean it is admitting guilt or that others may receive a settlement under similar circumstances. Businesses often live and die by their reputations, and having a reputation of wrongdoing or of handing out settlements may not project the appropriate image.
Source: abqjournal.com, Social media create potential for serious legal consequences, Alan M. Malott, March 10, 2014