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Bryan E. Kuhn
Counselor at Law, P.C.
Business & Employment Law Attorney

Confidentiality Clauses

Patrick Snay, the former head of a private prepatory school in Miami, Florida lost his $80,000 settlement after his daughter boasted about it on Facebook. Mr. Snay filed an age discrimination complaint when his 2010-2011 employment contract was not renewed. In November 2011, the school and Mr. Snay came to an agreement that he would be paid an $80,000.00 settlement as a resolution to his claims. However, four days after the agreement was signed, Snay’s daughter went on Facebook and boasted, “Mama and Papa Snay won the case against Gulliver. Gulliver is now officially paying for my vacation to Europe this summer. SUCK IT.” This message went to the daughter’s 1,200 Facebook followers which included current and former Gulliver students.

Within a few days, Gulliver Schools sent a letter to Snay’s attorney saying that he had broken a confidentiality clause and would not receive the settlement. The settlement agreement contained a confidentiality clause stating that neither Snay nor his wife could talk about the settlement to anyone except his attorneys and other professional advisers.

Mr. Snay filed a motion to compel enforcement of the settlement agreement. A hearing was held to determine if his daughter’s knowledge of the settlement and her Facebook post had violated the clause. Mr. Snay stated that he told his daughter about the settlement because she was also retaliated against by the school and knew about the case. Mr. Snay asserted that his daughter had quite a few psychological scars from the matter and was required to be placed in therapy so it was important for her to have closure. The lower court granted the motion to enforce the settlement.

However, the Third District Court of Appeal for the State of Florida reversed stating that Mr. Snay had, in fact, violated confidentiality continuing, “Mr. Snay violated the agreement by doing exactly what he promised not to do. His daughter then did precisely what the confidentiality agreement was designed to prevent, advertising to the Gulliver community that Mr. Snay had been successful in his age discrimination and retaliation case against the school.”

In Colorado, a confidentiality clause is a term in a settlement agreement which states that the terms of the agreement will not be disclosed. A typical confidentiality clause might read: “Employee and his counsel agree to keep the terms and conditions of this Agreement strictly confidential and agree not to discuss this Agreement or the facts and circumstances underlying this Agreement or its terms with the press or other except as follows: Employee may disclose the terms of the Agreement to his attorney, accountants or for tax purposes, if necessary, to any relevant taxing authority or agency.”

From the defense side, the most obvious reason for including a confidentiality clause is to keep the parties from sharing the outcome of the settlement with other potential plaintiffs. Simply put, the appearance of successful litigation breeds further litigation. Similarly, the plaintiff may want a confidentiality clause, to prevent the facts of the case, which could be embarrassing or humiliating, from becoming public knowledge. A confidentiality agreement is a contract and courts in Colorado will generally enforce private contacts so long as they are not against public policy. Like the Florida case, a Colorado court would likely enforce a confidentiality clause in a settlement agreement.

If you have a question about a contract clause, contact us at / to discuss your legal rights.

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