April 2014

A recent court decision provides some important life’s lessons for employers and employees alike. Here are the facts as reported by the court. Patrick Snay worked as the headmaster of Gulliver Preparatory School. When he was discharged he sued his former employer for age discrimination as well as for alleged mistreatment of his daughter as a student at the school. The case was settled with the school’s agreement to pay Mr. Snay the sum of $80,000.00 in exchange for, among other things, a full release of all claims and his promise to keep the terms and conditions of the settlement agreement strictly confidential. However, once the agreement was signed but before Mr. Snay got his hands on the $80,000.00, he told his teenage daughter about the settlement and promised her he would use some of the money to send her to Europe. Big mistake! The daughter promptly made the following post on Facebook for her roughly 1200 “friends” to read: “Mama and Papa Snay won the case against Gulliver. Gulliver is now officially paying for my vacation to Europe this summer. SUCK IT.”

Not surprisingly word of this brash posting got around and eventually got back to the school’s administration. Gulliver responded by refusing to pay Snay the $80,000.00 settlement and instead accusing him in court of breach of contract. The court agreed, acknowledging that the settlement agreement was itself a contract and that the daughter’s Facebook posting violated the settlement agreement’s confidentiality provision: “Snay violated the agreement by doing exactly what he had promised not to do. His daughter then did precisely what the confidentiality agreement was designed to prevent.”

This case reminds us that non-monetary terms of settlement agreements can be just as important to preserving an employer’s rights as the settlement sum is to a former employee. Confidentiality clauses, just as other clauses such as releases and no admission of wrongdoing, can be made key provisions to most well-drafted settlement agreements. As this case illustrates when done correctly, these provisions can become part of an enforceable contract.

The case provides another important lesson to employees and employers alike – If you want to keep something confidential, don’t tell a teenager with a penchant for using social media!

The attorneys at Wessels Sherman are skilled in drafting severance and settlement agreements that not only avoid law suits or extinguish claims, but also ensure that employers are not later viewed as having admitted to any wrongdoing and that the agreements are strictly confidential to the greatest extent allowed. Our attorneys also know how to enforce such agreements in court; after all, when properly drafted and executed they can be treated as any other contract.